Stockholders Equity Section of the Balance Sheet The newly hired accountant at Grain field Inc. is considering

Question:

Stockholders’ Equity Section of the Balance Sheet The newly hired accountant at Grain field Inc. is considering the following list of accounts as he prepares the balance sheet. All of the accounts have positive balances. The company is authorized to issue 1,000,000 shares of common stock and 10,000 shares of preferred stock. The treasury stock was purchased at $5 per share.

Treasury stock (common) .........$ 15,000

Retained earnings ............54,900

Dividends payable ...............1,500

Common stock, $1 par ...........100,000

Additional paid-in capital . .........68,400

Preferred stock, $10 par, 5% .......50,000

Required

1. Prepare the Stockholders’ Equity section of the balance sheet for Grain field.

2. Explain why some of the listed accounts are not shown in the Stockholders’ Equity section.

Common Stock
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Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...