Question

Witt Corporation received its charter during January of this year. The charter authorized the following stock:

Preferred stock: 10 percent, $11 par value, 21,900 shares authorized

Common stock: $9 par value, 50,300 shares authorized

During the year, the following transactions occurred in the order given:

1. Issued 38,200 shares of the common stock for $13 per share.
2. Sold 6,900 shares of the preferred stock for $17 per share.
3. Sold 3,600 shares of the common stock for $16 per share and 2,100 shares of the preferred stock for $27 per share.
4. Net income for the year was $65,000.

Required:

Prepare the stockholders' equity section of the balance sheet at the end of the year.

Answer 1

STAKEHOLDERS' EQUITY
Particulars	Amount	Amount
Preferred Stock-$10 par; 21,900 shares authorized and 9,000 shares issued		$         9,000
Common Stock-$9 par; 50,300 shares authorized and 41,800 shares issued		$     376,200
Total Capital Stock		$     385,200
Additional paid in Capital
In excess of par value - Preferred Stock	$    84,000
In excess of par value - Common Stock	$ 178,000
Total Additional Paid in Capital		$     262,000
Total Paid-in Capital		$     647,200
Retained Earnings		$       65,000
Total paid-in capital and retained earnings		$     712,200
Less : Tressury Stock		$              -
Total Stockholder's Equity		$     712,200