Textbook Problem

Statement of Stockholders' Equity

At the end of 2019, Stanley Utilities Inc. had the following equity accounts and balances:

During 2020, Stanley Utilities engaged in the following transactions involving its equity accounts:

1. Sold 3,300 shares of common stock for $15 per share.
2. Sold 1,000 shares of 12%, $100 par preferred stock at $105 per share.
3. Declared and paid cash dividends of $8,000.
4. Repurchased 1,000 shares of treasury stock (common) for $38 per share.
5. Sold 400 of the treasury shares for $42 per share.

Required:

1. Prepare the journal entries for Transactions a through e.
2. Assume that 2020 net income was $87,000. Prepare a statement of stockholders’ equity at December 31, 2020.