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In: Accounting

On January 1, 2022, Sage Hill Inc. had these stockholders’ equity balances. Common Stock, $1 par...

On January 1, 2022, Sage Hill Inc. had these stockholders’ equity balances.

Common Stock, $1 par (2,500,000 shares authorized, 650,000 shares issued and outstanding) $650,000
Paid-in Capital in Excess of Par Value 1,420,000
Retained Earnings 698,000 Accumulated Other Comprehensive Income 50,000

During 2022, the following transactions and events occurred.
1. Issued 46,500 shares of $1 par value common stock for $2 per share.
2. Issued 61,000 shares of common stock for cash at $6 per share.
3. Purchased 22,500 shares of common stock for the treasury at $3.05 per share.
4. Declared and paid a cash dividend of $205,500.
5. Earned net income of $422,000.
6. Had other comprehensive income of $15,800.

Prepare the stockholders’ equity section of the balance sheet at December 31, 2022.

Solutions

Expert Solution

Stockholder's equity section
$
Common stock,$1 par (2500000 shares authorized,757500 shares issued
and 735000 shares outstanding) (Note:1) 757500
Paid-in capital in excess of par value (Note:2) 1771500
Retained earnings (Note:3) 914500
Accumulated other comprehensive income (50000+15800) 65800
Treasury stock (22500*3.05) -68625
Total stockholder's equity 3440675
Note:1
Shares issued:
Nos.
Beginning balance 650000
Add:
common stock issued (46500+61000) 107500
Total 757500
Shares outstanding:
Nos.
Total shares issued 757500
Less: Treasury shares purchased 22500
Shares outstanding 735000
Common stock in $=757500*1=$ 757500
Note:2
Paid-in capital in excess of par value
$
Beginning balance 1420000
Add:Common stock issued
46500*(2-1) 46500
61000*(6-1) 305000
Total 1771500
Note:3
Retained earnings
$
Beginning balance 698000
Add: Net income 422000
1120000
Less: Cash dividend 205500
Ending balance 914500

ekkarill92 answered 2 years ago
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