On July 1, 2009, Pet Supplies Company had 600,000 shares of $0.50 par common stock issued and

Question:

On July 1, 2009, Pet Supplies Company had 600,000 shares of $0.50 par common stock issued and outstanding. The shareholders’ equity accounts at July 1, 2009, had the following balances:

Common stock ............$ 300,000

Additional paid-in capital .......1,500,000

Retained earnings ..........2,650,000

The following transactions occurred during the fiscal year ended June 30, 2010:

a. On July 30, issued 40,000 shares of $75 par value, 5% cumulative preferred stock at $85.

b. On October 1, reacquired 10,000 shares of common stock for $4 per share.

c. On December 1, declared a cash dividend of $1.00 per share on the common stock outstanding, payable on December 31, 2009, to shareholders of record on November 15.

d. Declared and paid dividends to preferred shareholders on December 31, 2009.

e. Net income for the year ended June 30, 2010, was $925,000.

Requirement

Prepare the shareholders’ equity section of Pet Supplies Company’s balance sheet at June 30, 2010.

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... Balance Sheet
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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...