Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations: January 2 Issue 100,000 shares of common stock for $60 per share. February 14 Issue 50,000 shares of preferred stock for $11 per share. May 8 Repurchase 10,000 shares of its own common stock for $50 per share. May 31 Reissue 5,000 shares of treasury stock for $55 per share. December 1 Declare a cash dividend on its common stock of $0.50 per share and a $25,000 (5% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.) December 30 Pay the cash dividends declared on December 1 2. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. Net income for the year was $480,000 (Amounts to be deducted should be indicated by a minus sign.) MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Common stock Additional paid in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity s 0 0
Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations: January 2 Issue 100,000 shares of common stock for $60 per share. February 14 Issue 50,000 shares of preferred stock for $11 per share. May 8 Repurchase 10,000 shares of its own common stock for $50 per share. May 31 Reissue 5,000 shares of treasury stock for $55 per share. December 1 Declare a cash dividend on its common stock of $0.50 per share and a $25,000 (5% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.) December 30 Pay the cash dividends declared on December 1 2. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. Net income for the year was $480,000 (Amounts to be deducted should be indicated by a minus sign.) MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Common stock Additional paid in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity s 0 0
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.6E
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Transcribed Image Text:Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The
following transactions affect stockholders' equity during 2018, its first year of operations:
January 2 Issue 100,000 shares of common stock for $60 per share.
February 14 Issue 50,000 shares of preferred stock for $11 per share..
May 8 Repurchase 10,000 shares of its own common stock for $50 per share.
May 31 Reissue 5,000 shares of treasury stock for $55 per share.
December 1 Declare a cash dividend on its common stock of $0.50 per share and a $25,000 (5% of par value) cash
dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on
December 30. (Hint: Dividends are not paid on treasury stock.)
December 30 Pay the cash dividends declared on December 1.
2. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. Net income for the year was $480,000.
(Amounts to be deducted should be indicated by a minus sign.)
MAJOR LEAGUE APPAREL
Balance Sheet
(Stockholders' Equity Section)
December 31, 2018
Stockholders' equity:
Common stock
Additional paid in capital
Total paid-in capital
Retained earnings
Treasury stock
Total stockholders' equity
$
0
0
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