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 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...
Step by Step Answer:
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton