The stockholders’ equity accounts of Cheyenne Corp. on January 1, 2017, were as follows.Preferred Stock (7%, $100 par noncumulative, 4,400 shares authorized) $264,000Common Stock ($4 stated value, 310,000 shares authorized) 1,033,333Paid-in Capital in Excess of Par Value—Preferred Stock 13,200Paid-in Capital in Excess of Stated Value—Common Stock 496,000Retained Earnings 683,500Treasury Stock (4,400 common shares) 35,200During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.Feb.1 Issued 4,620 shares of common stock for $32,340.Mar.20 Purchased 1,250 additional shares of common treasury stock at $8 per share.Oct.1 Declared a 7% cash dividend on preferred stock, payable November 1.Nov.1 Paid the dividend declared on October 1.Dec.1 Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017.Dec.31 Determined that net income for the year was $278,200. Paid the dividend declared on December 1. Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.

Step 1: Prepare journal entries to record the transactions:

Answered: The stockholders’ equity accounts of…

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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The stockholders’ equity accounts of Cheyenne Corp. on January 1, 2017, were as follows.

Preferred Stock (7%, $100 par noncumulative, 4,400 shares authorized)		$264,000
Common Stock ($4 stated value, 310,000 shares authorized)		1,033,333
Paid-in Capital in Excess of Par Value—Preferred Stock		13,200
Paid-in Capital in Excess of Stated Value—Common Stock		496,000
Retained Earnings		683,500
Treasury Stock (4,400 common shares)		35,200

During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb.	1	Issued 4,620 shares of common stock for $32,340.
Mar.	20	Purchased 1,250 additional shares of common treasury stock at $8 per share.
Oct.	1	Declared a 7% cash dividend on preferred stock, payable November 1.
Nov.	1	Paid the dividend declared on October 1.
Dec.	1	Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017.
Dec.	31	Determined that net income for the year was $278,200. Paid the dividend declared on December 1.

Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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