1. A company issues 100,000 shares of $1 par value common stock for $17 per share. To record this transaction, the company would credit Additional Paid-in Capital for:

2. Preferred stock is called preferred because it usually has two preferences over common stock. These preferences relate to:

Multiple Choice

• Dividends and voting rights.

• Par value and dividends.

• The preemptive right and voting rights.

• Dividends and distribution of assets if the corporation is dissolved.

3.A company has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during Year 1, its first year of operations:

January		2		Issues 100,000 shares of common stock for $19 per share.
February		6		Issues 1,400 shares of 9% preferred stock for $11 per share.
September		10		Purchases 11,000 shares of its own common stock for $24 per share.
December		15		Resells 5,500 shares of treasury stock at $29 per share.

In its first year of operations, the company has net income of $144,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $1,260 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for the company as of December 31, Year 1. (Amounts to be deducted should be indicated by a minus sign.)

Balance Sheet
(Stockholders Equity Section)
December 31, Year 1
Stockholders equity:
Total paid-in capital
Total stockholders equity