Question

Waterway Corporation’s post-closing trial balance at December 31, 2020, is shown as follows.

WATERWAY CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2020
		Dr.		Cr.
Accounts payable				$ 273,600
Accounts receivable		$ 496,000
Accumulated depreciation—buildings				176,000
Additional paid-in capital in excess
of par—common				1,428,000
From treasury stock				146,000
Allowance for doubtful accounts				32,000
Bonds payable				290,000
Buildings		1,466,000
Cash		198,000
Common stock ($1 par)				182,000
Dividends payable (preferred stock—cash)				4,400
Inventory		569,000
Land		381,000
Preferred stock ($50 par)				450,000
Prepaid expenses		42,000
Retained earnings				329,000
Treasury stock (common at cost)		159,000
Totals		$3,311,000		$3,311,000

At December 31, 2020, Waterway had the following number of common and preferred shares.

		Common		Preferred
Authorized		546,000		54,000
Issued		182,000		9,000
Outstanding		169,000		9,000

The dividends on preferred stock are $4 cumulative. In addition, the preferred stock has a preference in liquidation of $50 per share.

Prepare the stockholders’ equity section of Waterway’s balance sheet at December 31, 2020. (Enter account name only and do not provide descriptive information.)

Prepare the stockholders’ equity section of Waterway’s balance sheet at December 31, 2020. (Enter account name only and do not provide descriptive information.)

Answer 1

Stockholders Equity
December 31, 2020

Particulars	Amount ($)	Amount ($)
Capital stock
Preferred stock, $4 cumulative, par value $50 per share; authorized 54000 shares, issues and outstanding 9000 shares		450000
Common stock, per share $1; authorized 546000 shares, issued 182000 shares, outstanding 169000 shares		182000
Total capital stock		632000
Additional paid in capital-
In excess of par- common	1428000
From sale of treasury stock	146000
Total additional paid in capital		1574000
Total paid in capital		2206000
Retained earnings		329000
Total paid in capital and retained earnings		2535000
Less: Treasury stock, 13000 shares at cost		159000
Total Stockholders Equity		$2376000

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