Question

Exercise 15-17

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

NOVAK CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2020
		Dr.		Cr.
Accounts payable				$ 166,200
Accounts receivable		$ 503,000
Accumulated depreciation—buildings				181,000
Additional paid-in capital in excess
of par—common				1,318,000
From treasury stock				175,000
Allowance for doubtful accounts				30,000
Bonds payable				322,000
Buildings		1,344,000
Cash		194,000
Common stock ($1 par)				180,000
Dividends payable (preferred stock—cash)				3,800
Inventory		535,000
Land		361,000
Preferred stock ($50 par)				500,000
Prepaid expenses		37,000
Retained earnings				279,000
Treasury stock (common at cost)		181,000
Totals		$3,155,000		$3,155,000

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

		Common		Preferred
Authorized		540,000		60,000
Issued		180,000		10,000
Outstanding		174,000		10,000

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 Novak’s balance sheet at December 31, 2020. (Enter account name only and do not provide descriptive information.)

Answer 1

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