Question

Eastport Inc. was organized on June 5, Year 1. It was authorized to issue 480,000 shares of $9 par common stock and 50,000 shares of 5 percent cumulative class A preferred stock. The class A stock had a stated value of $20 per share. The following stock transactions pertain to Eastport Inc.:

1. Issued 24,000 shares of common stock for $14 per share.
2. Issued 15,000 shares of the class A preferred stock for $25 per share.
3. Issued 48,000 shares of common stock for $17 per share.

Required

Prepare the stockholders’ equity section of the balance sheet immediately after these transactions have been recognized.

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Item 1

Item 1 2.22 points

Exercise 8-7A (Algo) Recording and reporting common and preferred stock transactions LO 8-3, 8-4

Eastport Inc. was organized on June 5, Year 1. It was authorized to issue 480,000 shares of $9 par common stock and 50,000 shares of 5 percent cumulative class A preferred stock. The class A stock had a stated value of $20 per share. The following stock transactions pertain to Eastport Inc.:

1. Issued 24,000 shares of common stock for $14 per share.
2. Issued 15,000 shares of the class A preferred stock for $25 per share.
3. Issued 48,000 shares of common stock for $17 per share.

Required

Prepare the stockholders’ equity section of the balance sheet immediately after these transactions have been recognized.

EASTPORT INC.
Balance Sheet (partial)
For the Year Ended Year 1
Stockholders' Equity
Total Paid-In Capital
Total stockholders’ equity

Answer 1

Stockholders’ Equity:
Preferred Stock, $20 stated value, 5% cumulative class A, 50,000 shares authorized,15000 shares issued and outstanding(15000*20)		300000
Common Stock, $9 par value, 480,000 shares authorized, 72,000 shares issued and outstanding(72000*9)		648,000
Paid-In Capital in Excess of Stated Value , Preferred Stock(15000x(25-20))		75000
Paid-In Capital in Excess of Par, Common Stock(24000*(14-9))+(48000*(17-9))		504,000
Retained Earnings		0
Total Stockholders’ Equity		1,527,000

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