Question

The following is a summary of all relevant transactions of Martinez Corporation since it was organized in 2017.

In 2017, 14,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. In 2018, 1,100 shares were issued as a stock dividend when the stock was selling for $60. 290 shares of common stock were bought in 2019 at a cost of $64 per share. These 290 shares are still in the company treasury.

In 2018, 10,200 preferred shares were authorized and the company issued 4,700 of them ($100 par value) at $120. Some of the preferred stock was reacquired by the company and later reissued for $4,430 more than it cost the company.

The corporation has earned a total of $583,700 in net income after income taxes and paid out a total of $304,600 in cash dividends since incorporation.

Prepare the stockholders’ equity section of the balance sheet in proper form for Martinez Corporation as of December 31, 2019. Account for treasury stock using the cost method.

Answer 1