Shareholders' Equity Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016: The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity securities. At year-end, the market value of these securities was $47,500. Herrera sold 500 shares of treasury stock for $23 per share. Net income for the first year of operations was $16,000. No dividends were declared. Required: Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016
Shareholders' Equity Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016: The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity securities. At year-end, the market value of these securities was $47,500. Herrera sold 500 shares of treasury stock for $23 per share. Net income for the first year of operations was $16,000. No dividends were declared. Required: Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter12: Statement Of Stockholders’ Equity (stockeq)
Section: Chapter Questions
Problem 1R: Chen Corporation began 2012 with the following stockholders equity balances: The following selected...
Related questions
Question
Shareholders' Equity
Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016:
- The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share.
- The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share.
- Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for
treasury stock . - Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity securities. At year-end, the market value of these securities was $47,500.
- Herrera sold 500 shares of treasury stock for $23 per share.
- Net income for the first year of operations was $16,000. No dividends were declared.
Required:
Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage