The Connor Corporation began the 2018 fiscal year with items related to stockholders’ equity that follow:

                                                                                                                          Dr.                    Cr.

Common stock, $1 par, 50,000 shares authorized                                                               20,000

Additional paid in capital in excess of par on Common Stock                                             240,000

Cumulative Preferred stock, 7%, $100 par, 10,000 shares authorized                               150,000

Additional paid in capital in excess of par on Preferred Stock                                            3,000

Paid in capital from Treasury stock                                                                                     5,000

Treasury stock, 2,000 shares acquired October 1, 2017                        42,000

Retained earnings                                                                                                                 236,000

Note: Dividends are one year in arrears.

The following stock transactions occurred during 2018:

1.      Jan. 10    Paid the annual dividend on preferred stock and the $2.00 per share dividend on common stock. These dividends had been declared on December 31, 2016.

2.      Mar. 2     Issued 500 shares of preferred stock at $120 per share.

3.      May 8     Reissued 1,000 shares of treasury stock at $28 per share.

4.      June 2     Purchased 2,000 shares of common stock from former executives for $23 each. These shares were immediately retired.

5.      June 15   Issued 1,000 shares of common stock to current employees for $22 per share. Cash of $11,000 was received from the employees.

6.      July 15    Received 9,900 from the employees for the balance due from 90% of the subscribers. The company issued their shares to them. The defaulting subscriber's shares were sold at $20 per share and the decline absorbed by the defaulting subscriber who was issue a check for the amount owed.

7.      Sept 1     Declared and distributed a 15% stock dividend on the outstanding common stock. The stock is selling for $23 per share.

8.      Oct. 1      Split the common stock two for one, reducing the par value to $.50 per share. This split applies to treasury shares too.

9.      Dec. 10   Declared the annual dividend on the outstanding preferred stock. Declared a $1 per share dividend on the outstanding common stock, to be paid on January 10, 2019.

10.    Dec. 31   Net income for the year ending December 31, 2018 was $155,000

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Required:

Prepare the stockholders’ equity section on the balance sheet for Connor Company, December 31, 2018 Use proper accounting form and show how you arrived at final amounts for partial credit. You may show this through the use of T-accounts.

Answer rating: 100% (QA)

CONNOR CORPORATION Stockholders Equity section of the Balance ... View the full answer