On January 1, 2010 the Knox Company showed the following alphabetical list of stockholders’ equity balances:
Additional paid-in capital on common stock ........ $130,000
Additional paid-in capital on preferred stock .......... 6,000
Common stock, $10 par ................ 100,000
Preferred stock, $100 par ................ 50,000
Retained earnings ................... 224,000
During 2010, the following events occurred and were properly recorded by the company:
1. The company purchased an investment in available-for-sale securities. At year-end, the fair value of the securities had increased by $9,000.
2. The company issued 2,000 shares of common stock for $25 per share.
3. The company issued 110 shares of preferred stock for $116 per share.
4. The company reaccquired 400 shares of its common stock as treasury stock at a cost of $26 per share. (Hint: Record the reacquisition cost in a Treasury Stock account.)
5. The company earned net income of $57,000.
6. The company paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of 2010 (treasury stock is not entitled to dividends).

Prepare a statement of changes in stockholders’ equity for 2010. (Include retained earnings.)

  • CreatedDecember 09, 2013
  • Files Included
Post your question