Question

I NEED TO SEE CALCULCULATOIN AND PROCESSES TO STUDY FOR IT.

The stockholders' equity section of ABC Company shows the following on December 31, 2017:

           

Preferred stock—6%, $100 par, 5,000 shares outstanding             $   500,000

            Common stock—$10 par, 60,000 shares outstanding                        600,000

            Paid-in capital in excess of par                                                        200,000

            Retained earnings                                                                           118,000

            Total stockholders' equity                                                          $1,418,000

During fiscal year 2018, the following activity occurred:

• Net income was $75,000.
• Issued cash dividends for $30,000.
• Purchased 5,000 shares of its own common stock for $75,000.

Instructions:

Prepare the December 31, 2018, stockholders equity section. Make sure to include the proper descriptions of stock (i.e. shares outstanding).

Stockholders' Equity December 31, 2018
Total Stockholders’ Equity

Answer 1

Stockholders’ Equity
December 31, 2020
	Capital stock
	Preferred stock - 6%, $100 par; issued and outstanding 5,000 shares	$500,000
	Common stock, par value $10 per share; issued 60,000 shares, and outstanding 55,000 share	$600,000
	Total Capital Stock	$1,100,000
	Paid-in capital in excess of par	$200,000
	Total paid-in capital	$1,300,000
	Retained earnings	$163,000
	Total paid-in capital and retained earnings	$1,463,000
	Less: Treasury stock, 5,000 shares at cost	$75,000
	Total stockholders’ equity	$1,388,000
	Working
	Retained earnings	$163,000
	(118,000 + 75,000 - 30,000)