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On January 1, 2022, Larkspur, Inc. had these stockholders’ equity balances. Common Stock, $1 par (2,200,000...

On January 1, 2022, Larkspur, Inc. had these stockholders’ equity balances. Common Stock, $1 par (2,200,000 shares authorized, 675,000 shares issued and outstanding) $675,000 Paid-in Capital in Excess of Par Value 1,440,000 Retained Earnings 703,000 Accumulated Other Comprehensive Income 47,000 During 2022, the following transactions and events occurred. 1. Issued 47,500 shares of $1 par value common stock for $4 per share. 2. Issued 57,000 shares of common stock for cash at $6 per share. 3. Purchased 22,100 shares of common stock for the treasury at $3.40 per share. 4. Declared and paid a cash dividend of $113,000. 5. Earned net income of $407,000. 6. Had other comprehensive income of $17,400. Prepare the stockholders’ equity section of the balance sheet at December 31, 2022.

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Expert Solution

No General Journal Debit Credit
2022
1) Cash (47,500 shares * $ 4 ) $ 190,000
      Common stock (47,500 shares *$ 1 ) $ 47,500
      Paid in Capital in excess of Par value-Common Stock (47,500 shares*$3) $ 142,500
(To record issues of Common stock 47,500 shares @ $ 4 per share )
2) Cash (57,000 shares * $ 6 ) $ 342,000
      Common stock (57,000 shares *$ 1 ) $ 57,000
      Paid in Capital in excess of Par value-Common Stock (57,000 shares*$5) $ 285,000
(To record issues of Common stock 57,000 shares @ $ 6 per share )
3) Treasury Stock (22,100 shares * $ 3.40 ) $ 75,140
               Cash $ 75,140
(To record Purchase of Treasury stock 22,100 shares @ 3.40 per share )
4) Retained Earnings $ 113,000
                  Cash $ 113,000
(To record declared and paid Cash dividends )
5) Income Summary $ 407,000
                Retained earnings $ 407,000
(To record Net income transferred to Retained earnings )
                                                                                                        Larkspur Inc.
                                                                                Stockholder's Equity Section
                                                                                     As on December 31,2022
Stockholders Equity :
Paid in capital :
Capital Stock :
Common Stock ,$1 Par (2,200,000 shares authorized ,801,600 shares issued and 779,500 Outstanding) $ 779,500
Additional Paid in capital :
Paid in capital in excess of Par value -Common stock (1,440,000+142,500+285,000) $ 1,867,500
Total Paid in Capital $ 2,647,000
Retained earnings ($703,000-$113,000+$ 407,000) $ 997,000
Total Paid in Capital and Retained Earnings $ 3,644,000
Less: Treasury Stock (22,100 shares *$ 3.40 per share ) ($ 75,140 )
Stockholders Equity $ 3,568,860

ekkarill92 answered 2 years ago
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