Question

Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders’ equity.

Preferred Stock, 150,000 shares		$ 3,000,000
Common Stock, 2,000,000 shares		10,000,000
Paid-in Capital in Excess of Par—Preferred Stock		200,000
Paid-in Capital in Excess of Par—Common Stock		27,000,000
Retained Earnings		4,500,000

The following transactions affected stockholders’ equity during 2021.

Jan. 1		30,000 shares of preferred stock issued at $22 per share.
Feb. 1		50,000 shares of common stock issued at $20 per share.
June 1		2-for-1 stock split (par value reduced to $2.50).
July 1		30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.
Sept. 15		10,000 shares of treasury stock reissued at $11 per share.
Dec. 31		The preferred dividend is declared, and a common dividend of 50¢ per share is declared.
Dec. 31		Net income is $2,100,000.

Prepare the stockholders’ equity section for Hatch Company at December 31, 2021. (Enter account name only and do not provide descriptive information.)

Answer 1

Preferred Stock, 180,000 shares	$          36,00,000	=3000000+30000*20
Common Stock, 2,050,000 shares	$       1,02,50,000	=10000000+50000*5
Paid-in Capital in Excess of Par—Preferred Stock	$            2,60,000	=200000+30000*2
Paid-in Capital in Excess of Par—Common Stock	$       2,77,50,000	=27000000+50000*15
Paid in capital from Treasury Stock	$                10,000	=10000*1
Retained Earnings	$          42,72,000	=4500000-(2050000*2-20000)*0.5-3600000*8%+2100000
Subtotal	$       4,61,42,000
Treasury Stock	$ -2,00,000
Total Stockholder's Equity	$       4,59,42,000