Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2019: 1. The state

Question:

Herrera Manufacturing Corporation completed the following transactions during its first
year of operation, 2019:
1. The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share.
2. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share.
3. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock.
4. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale debt securities. At year-end, the market value of these securities was $47,500.
5. Herrera sold 500 shares of treasury stock for $23 per share.
6. Net income for the first year of operations was $16,000. No dividends were declared.

Required:
Prepare the shareholders’ equity section (and any related notes to the financial statements) of Herrera’s balance sheet as of December 31, 2019.

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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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