Question: I am having trouble computing the following, please help and show how to resolve with a step-by-step explanation (preparing stockholders equity) Pearl Company has two
I am having trouble computing the following, please help and show how to resolve with a step-by-step explanation (preparing stockholders equity)
Pearl Company has two classes of capital stock outstanding:8%, $20par preferred and $5par common. At December 31, 2020, the following accounts were included in stockholders' equity.
| Preferred Stock,159,600shares | $3,192,000 | |
| Common Stock,1,970,000shares | 9,850,000 | |
| Paid-in Capital in Excess of ParPreferred Stock | 193,000 | |
| Paid-in Capital in Excess of ParCommon Stock | 27,534,000 | |
| Retained Earnings | 4,424,000 |
The following transactions affected stockholders' equity during 2021.
| Jan. 1 | 29,100shares of preferred stock issued at $22per share. | |
| Feb. 1 | 47,100shares of common stock issued at $20per share. | |
| June 1 | 2-for-1 stock split (par value reduced to $2.50). | |
| July 1 | 32,500shares of common treasury stock purchased at $11per share. Pearl uses the cost method. | |
| Sept. 15 | 10,400shares of treasury stock reissued at $12per share. | |
| Dec. 31 | The preferred dividend is declared, and a common dividend of46 per share is declared. | |
| Dec. 31 | Net income is $2,112,000. |
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