The following is Saratoga Springs Companys stockholders equity section of the balance sheet on December 31, 2011:

Question:

The following is Saratoga Springs Company’s stockholders’ equity section of the balance sheet on December 31, 2011:

Preferred stock (7%, $50 par, noncumulative, 22,000 shares authorized,

9,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $450,000

Common stock ($8 par, 110,000 shares authorized, 94,000 shares issued

and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752,000

Paid-in capital in excess of par, preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000

Paid-in capital in excess of par, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540,000

Required:

1. Journalize the following 2012 transactions:

a. Issued 3,000 preferred shares at $62 per share.

b. Reacquired 2,500 common shares for the treasury at $17 per share.

c. Declared and paid a $l.50-per-share dividend on common stock in addition to paying the required preferred dividends. (Note: Debit Retained Earnings directly.)

d. Reissued 900 treasury shares at $20 per share.

e. Reissued the remaining treasury shares at $16 per share.

f. Earnings for the year were $83,000, including $350,000 of revenues and $267,000 of expenses.

2. Prepare the stockholders’ equity section of the balance sheet for the company at December 31, 2012.

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...