Kelly Groucutt Company reported the following balances at December 31, 2009: common stock $400,000; paid-in capital in

Question:

Kelly Groucutt Company reported the following balances at December 31, 2009: common stock $400,000; paid-in capital in excess of par value $100,000; retained earnings $250,000.

During 2010, the following transactions affected stockholder’s equity.

1. Issued preferred stock with a par value of $125,000 for $200,000.

2. Purchased treasury stock (common) for $40,000.

3. Earned net income of $140,000.

4. Declared and paid cash dividends of $56,000.

Instructions

Prepare the stockholders’ equity section of Kelly Groucutt Company’s December 31, 2010, balance sheet.

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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...