Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018. Power Drive has the following transactions affecting stockholders' equity in 2018.
  

March 1 Issues 49,000 additional shares of $1 par value common stock for $46 per share.

May 10 Repurchases 4,400 shares of treasury stock for $49 per share.

June 1 Declares a cash dividend of $1.20 per share to all stockholders of record on June 15. (Hint:  Dividends are not paid on treasury stock.)

July 1 Pays the cash dividend declared on June 1.

October 21 Reissues 2,200 shares of treasury stock purchased on May 10 for $54 per share.
  

Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Common Stock, $100,000; Additional Paid-in Capital, $3,900,000; and Retained Earnings, $1,400,000. Net income for the year ended December 31, 2018, is $540,000.
  

Required:

Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

POWER DRIVE CORPORATION
Statement of Stockholders' Equity
For the Year Ended December 31, 2018
	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Total Stockholders' Equity
Balance, January 1	$100,000	$3,900,000	$1,400,000	$0	$5,400,000
Issued common stock
Purchase treasury stock
Dividends
Sale of treasury stock
Net income
Balance, December 31	$149,000	3,900,000	1,400,000	0	$5,449,000

Answer 1

Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

POWER DRIVE CORPORATION Statement of Stockholders' Equity For the Year Ended December 31, 2018 Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Stockholders' Equity Balance, January 1 $100,000 $3,900,000 $1,400,000 $0 $5,400,000 Issued common stock 49000 2205000 2254000 Purchase treasury stock -215600 -215600 Dividends -173520 -173520 Sale of treasury stock 11000   107800 118800 Net income 540000 540000 Balance, December 31 $149,000 6116000 1766480 -107800 $7923680