Question: Refer to the information provided in P10 2C In P10 2C Sweet

Refer to the information provided in P10-2C.
In P10-2C, Sweet Sixteen has two classes of stock authorized: $100 par preferred and $1 par value common. As of the beginning of 2015, 1,000 shares of preferred stock have been issued and 20,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2015:
March 1 Issue 3,000 additional shares of common stock for $22 per share.
April 1 Issue 5,000 additional shares of preferred stock for $110 per share.
June 1 Declare a cash dividend on common stock of $1 per share and a cash dividend on preferred stock of $5 per share to all stockholders of record on June 15.
June 30 Pay the cash dividends declared on June 1.
August 1 Purchase 2,000 shares of common treasury stock for $18 per share.
October 1 Reissue 1,000 shares of treasury stock purchased on August 1 for $20 per share.
Sweet Sixteen has the following beginning balances in its stockholders’ equity accounts on January 1, 2015: preferred stock, $100,000, common stock, $20,000; paid-in capital, $380,000; and retained earnings, $450,000. Net income for the year ended December 31, 2015, is $65,000.

Taking into consideration all the transactions during 2015, respond to the following for Sweet Sixteen:
1. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2015.
2. Prepare the statement of stockholders’ equity for the year ended December 31, 2015.
3. Explain how requirements 1 and 2 are similar and how they are different.

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  • CreatedJuly 15, 2014
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