Question

Stockholders’ Equity Section Use the information presented in the table and shown below to prepare the stockholders’ equity section of ABC Company's balance sheet at December 31, 2017. At December 31, 2017, ABC Company had the following number of common and preferred shares. Common Preferred Authorized 600,000 60,000 Issued 200,000 10,000 Outstanding 190,000 10,000 The dividends on preferred stock are $4 cumulative. In addition, the preferred stock has a preference in liquidation of $50 per share.

Answer 1

Given that,

ABC company had the following number of common and preferred shares.

• Preferred shares authorised 60000 shares, issued and outstanding 10000.
• Common shares authorised 600000 shares , isuued 200000, outstanding 190000.

The dividend on preferred stock are $4 cumulative and preferred stock has a preference in liquidation of$50per share.

REPORT

ABC COMPANY'S

STOCK HOLDERS EQUITY

AT DECEMBER 31,2017

Particulars	$
(A) Preferred stock : ($4 cumulative, par value $50per share) 60,000shares authorised, 10,000 shares issued and outstanding (10,000shares×$50 per share)	500,000
(B) Common stock: ($1 par value) 6,00,000 shares authorised,200,000 shares issued and 190,000 shares outstanding. (200,000 shares × $1 per share)	200,000
Total share holders equity (A+B)	700,000

Note : Total share holders equity is the combination of share holders funds and retained earnings. But in the above questions absence of retained earnings information assume as a nil .