Question

In: Accounting

list the errors the following stockholders equity section of the balance sheet prepared as of the...

list the errors the following stockholders equity section of the balance sheet prepared as of the end of the current year:
paid in capital:
preferred 2% stock,$80 par(125,000 shares authorized and issued $10,000,000
excess of issue price over par 500,000-10,500,000
retaining earnings $96,700,000
treasury stock(75,000 shares to cost)-1,755,000
dividends payable 430,000
total paid in capital $109,385,000
common stock $20 par (1,000,000 shares authorized, 825,000 shares issued - $17,655,000
organizing costs 300,000
total stockholders equity $127,340,000

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Expert Solution

Stockholders' equity Working
Paid in capital
Capital stock
Preferred Stock (2%, $80 par, 125,000 authorized and fully issued) $    10,000,000
Common stock ($20 par value, 1,000,000 authorized and 825,000 issued) $    16,500,000 825,000*$20
Total capital stock $    26,500,000
Additional paid in capital
In excess of par value - preferred stock $     500,000
In excess of par value - common stock $ 1,155,000 $17,655,000 - $16,500,000
Total additional paid in capital $       1,655,000
Total paid in capital $    28,155,000
Retained earnings $    96,400,000 $96,700,000-$300,000
Total paid in capital and retained earnings $ 124,555,000
Less: Treasury stock (75,000 common shares) $    (1,755,000)
Total stockholders' equity $ 122,800,000

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