Whispering Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par...

Whispering Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’ equity.

Preferred Stock, 137,800 shares		$ 2,756,000
Common Stock, 2,014,000 shares		10,070,000
Paid-in Capital in Excess of Par—Preferred Stock		199,000
Paid-in Capital in Excess of Par—Common Stock		26,771,000
Retained Earnings		4,429,000

The following transactions affected stockholders’ equity during 2018.

Jan. 1		30,900 shares of preferred stock issued at $24 per share.
Feb. 1		50,100 shares of common stock issued at $21 per share.
June 1		2-for-1 stock split (par value reduced to $2.50).
July 1		32,700 shares of common treasury stock purchased at $10 per share. Whispering uses the cost method.
Sept. 15		9,400 shares of treasury stock reissued at $11 per share.
Dec. 31		The preferred dividend is declared, and a common dividend of 46¢ per share is declared.
Dec. 31		Net income is $2,093,000.

Prepare the stockholders’ equity section for Whispering Company at December 31, 2018. (Enter account name only and do not provide descriptive information.)

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Expert Solution

HATCH COMPANY
Stockholders’ Equity
December 31, 2018
Capital Stock
Preferred Stock	$33,74,000
Common Stock	$1,03,20,500
Total Capital Stock		$1,36,94,500
Additional Paid in capital
Preferred Stock	$3,22,600
Common Stock	$2,75,72,600
Treasury Stock	$9,400
		$2,79,04,600
Total Paid in Capital		$4,15,99,100
Retained Earnings		$77,30,688
Total Paid-in Capital and Retained Earnings		$4,93,29,788
Less:Treasury Stock		$2,33,000
Total Stockholders' Equity		$4,90,96,788

Preferred Stock
Date	Balance	$27,56,000
01-Jan	(30900*20)	$6,18,000

	Balance	$33,74,000

Paid-in Capital in Excess of Par—Common Stock
01-Feb	Balance	$2,67,71,000
	(50100*16)	$8,01,600
		$2,75,72,600

Common Stock
01-Feb	Balance	$1,00,70,000
	(50100*5)	$2,50,500
		$1,03,20,500

Retained Earnings
	Balance	$44,29,000
31-Dec	Dividend Paid
	(3374000*8%)	-$2,69,920
	(2014000+50100-32700+9400)*0.46	-$9,38,768
	Add : Net income	$20,93,000
		$77,30,688

Paid-in Capital in Excess of Par—Preferred Stock
	Balance	$1,99,000
Jan-01	(30900*4)	$1,23,600
		$3,22,600

Treasury Stock
Jul-01	(32700*10)	$3,27,000
Sep-15	(9400*10)	-$94,000
		$2,33,000

Paid-in Capital from Treasury Stock
31-Dec	9400*1	$9,400

ekkarill92 answered 4 months ago

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