Reporting stockholders' equity
Using the following accounts and balances, prepare the Stockholders’ Equity section of the balance sheet using Method 1 of Exhibit 8. One hundred thousand shares of common stock are authorized, and 5.000 shares have been reacquired.
|Common Stock, $2 par||$ 150,000|
|Paid In Capital from Sale of Treasury Stock||60,000|
|Paid In Capital in Excess of Par—Common Stock||2,250,000|
Stockholders’ Equity Section: It is refers to the section of the balance sheet that shows the available balance stockholders’ equity as on reported date at the end of the financial year.
To prepare: The stockholders’ equity section of the balance sheet.
Prepare the stockholders’ equity section of the balance sheet.
|Stockholders’ equity section|
|Particulars||Amount ($)||Amount ($)||Amount ($)|
Common Stock, $2 par (100,000 shares
authorized, 75,000 shares issued)
|Excess over par||$2,250,000|
|Paid in capital, common stock||$2,400,000|
|From sale of treasury stock||$60,000|
|Total paid-in capital||$2,460,000|
|Less: Treasury stock (5,000 shares at cost)||($140,000)|
|Total stockholders’ equity||$13,200,000|
The Proforma of the reporting the stockholders’ equity section of the partial balance sheet is shown below for better understanding: