Hearty Foods, Inc., is authorized to issue 5,000,000 shares of $2.00 par common stock . In its initial public offering


Hearty Foods, Inc., is authorized to issue 5,000,000 shares of $2.00 par common stock. In its initial public offering during 2010, Hearty issued 500,000 shares of its $2.00 par common stock for $5.00 per share. Over the next year, hearty’s stock price increased, and the company issued 395,000 more shares at an average price of $9.00. During 2012, the price of Hearty s common stock dropped to $7.25, and Hearty purchased 61,000 shares of its common stock for the treasury. After the market price of the common stock rose in 2013, Hearty sold 38,000 shares of the treasury stock for $8.00 per share.
During the 5 years 2010 to 2015, Hearty earned net income of $1,150,000 and declared and paid cash dividends of $700,000. Stock dividends of $600,480 were distributed to the stockholders in 2011, with $150,120 credited to common stock and $450,360 credited to additional paid-in capital. At December 31, 2015, total assets of the company are $14,200,000, and liabilities add up to $7,833,250.

1. Show the computation of Hearty’s total stockholders equity at December 31, 2015. Present a detailed computation of each element of stockholders equity. Use the end-of-chapter summary problem on pages 566 and 567 to format your answer.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...

This problem has been solved!

Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Related Book For  answer-question

Financial accounting

ISBN: 978-0136108863

8th Edition

Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas

View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: December 10, 2012 04:39:39