Required information Problem 10-5A Understand stockholders' equity and the statement of stockholders' equity (LO10-7) [The following information applies to the questions displayed below.] Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 200 shares of preferred stock and 2,800 shares of common stock have been issued. The following transactions affect stockholders' equity during 2021: 1 Issue 1,000 shares of common stock for $30 per share. 15 Purchase 600 shares of treasury stock for $23 per share. 10 Resell 100 shares of treasury stock purchased on May 15 for $28 per share. 15 Issue 100 shares of preferred stock for $33 per share. 1 Declare a cash dividend on both common and preferred stock of $0.85 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.) March ay July October December December 31 Pay the cash dividends declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Preferred Stock, $200; Common Stock, $28; Additional Paid-in Capital, $64,000; and Retained Earnings, $24,500. Net income for the year ended December 31, 2021, is $9,600 Taking into consideration the beginning balances on January 1, 2021 and all the transactions during 2021, respond to the following for Donnie Hilfiger: Required: 1. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) DONNIE HILFIGER Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Preferred stock Total paid-in capital 0 Total stockholders' equity 0 Problem 10-5A Part 2 2. Prepare the statement of stockholders' equity for the year ended December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) DONNIE HILFIGER Statement of Stockholders' Equity For the Year Ended December 31, 2021 Total Preferred Additional Retained Treasury Stock Stockholders' Equity Common Stock Paid-in Capital Stock Earnings Balance, January 1 Issue common stock Purchase treasury stock Resell treasury stock Issue preferred stock Declare cash dividends Net income 0 0 0 0 0 0 Balance, December 31