Question

Problem 15-3 Hatch Company has two classes of capital stock outstanding: 7%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders’ equity. Preferred Stock, 154,000 shares $ 3,080,000 Common Stock, 2,020,000 shares 10,100,000 Paid-in Capital in Excess of Par—Preferred Stock 206,400 Paid-in Capital in Excess of Par—Common Stock 27,430,000 Retained Earnings 4,597,000 The following transactions affected stockholders’ equity during 2015. Jan. 1 35,100 shares of preferred stock issued at $24 per share. Feb. 1 60,300 shares of common stock issued at $20 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 40,800 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method. Sept. 15 10,500 shares of treasury stock reissued at $11 per share. Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared. Dec. 31 Net income is $2,107,000. Prepare the stockholders’ equity section for Hatch Company at December 31, 2015. (Enter account name only and do not provide descriptive information.) HATCH COMPANY Stockholders’ Equity December 31, 2015 $ $ : $ Show List of Accounts Link to Text Link to Text Question Attempts: 0 of 3 used Save for later Submit Answer Problem 15-3 Hatch Company has two classes of capital stock outstanding: 7%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders’ equity. Preferred Stock, 154,000 shares $ 3,080,000 Common Stock, 2,020,000 shares 10,100,000 Paid-in Capital in Excess of Par—Preferred Stock 206,400 Paid-in Capital in Excess of Par—Common Stock 27,430,000 Retained Earnings 4,597,000 The following transactions affected stockholders’ equity during 2015. Jan. 1 35,100 shares of preferred stock issued at $24 per share. Feb. 1 60,300 shares of common stock issued at $20 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 40,800 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method. Sept. 15 10,500 shares of treasury stock reissued at $11 per share. Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared. Dec. 31 Net income is $2,107,000. Prepare the stockholders’ equity section for Hatch Company at December 31, 2015. (Enter account name only and do not provide descriptive information.) HATCH COMPANY Stockholders’ Equity December 31, 2015 $ $ : $ Show List of Accounts Link to Text Link to Text Question Attempts: 0 of 3 used Save for later Submit Answer Problem 15-3 Hatch Company has two classes of capital stock outstanding: 7%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders’ equity. Preferred Stock, 154,000 shares $ 3,080,000 Common Stock, 2,020,000 shares 10,100,000 Paid-in Capital in Excess of Par—Preferred Stock 206,400 Paid-in Capital in Excess of Par—Common Stock 27,430,000 Retained Earnings 4,597,000 The following transactions affected stockholders’ equity during 2015. Jan. 1 35,100 shares of preferred stock issued at $24 per share. Feb. 1 60,300 shares of common stock issued at $20 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 40,800 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method. Sept. 15 10,500 shares of treasury stock reissued at $11 per share. Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared. Dec. 31 Net income is $2,107,000. Prepare the stockholders’ equity section for Hatch Company at December 31, 2015. (Enter account name only and do not provide descriptive information.) HATCH COMPANY Stockholders’ Equity December 31, 2015 $ $ : $ Show List of Accounts Link to Text Link to Text Question Attempts: 0 of 3 used Save for later Submit Answer Hatch Company has two classes of capital stock outstanding: 7%, $20 par preferred and $5 par common. At December 31, 2014, the following accounts were included in stockholders’ equity. Preferred Stock, 154,000 shares $ 3,080,000 Common Stock, 2,020,000 shares 10,100,000 Paid-in Capital in Excess of Par—Preferred Stock 206,400 Paid-in Capital in Excess of Par—Common Stock 27,430,000 Retained Earnings 4,597,000 The following transactions affected stockholders’ equity during 2015. Jan. 1 35,100 shares of preferred stock issued at $24 per share. Feb. 1 60,300 shares of common stock issued at $20 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 40,800 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method. Sept. 15 10,500 shares of treasury stock reissued at $11 per share. Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared. Dec. 31 Net income is $2,107,000. Prepare the stockholders’ equity section for Hatch Company at December 31, 2015

Answer 1

HATCH COMPANY
Stockholders’ Equity
December 31, 2016
Contributed Capital:
Preferred Stock, $20 par, 7%, 189,100 shares issued and outstanding		$3,782,000.00
Common stock, $2.50 par, 4,160,600 shares issued 4,130,300 shares outstanding		$10,401,500.00
Total Capital Stock		$14,183,500.00
Additional Paid-in Capital:
Excess over par-preferred (35,100 x ($24 - $20) + 206400	$346,800.00
Excess over par-common (60300 x ($20 -$5) + 27,430,000	$28,334,500.00
From treasury stock transactions (10,500 x $1)	$10,500.00
Total Additional Paid-in Capital		$28,691,800.00
Total Paid-in Capital		$42,875,300.00
Retained Earnings		$4,374,110.00
Total Paid-in Capital and Retained Earnings		$47,249,410.00
Less: Cost of treasury stock (30,300 shares common)		-$303,000.00
Total stockholders’ equity		$46,946,410.00
Preferred stock (154,000 + 35,100)	189100	shares
Issued Common Stock = (2,020,000 + 60,300 ) x 2	4,160,600	shares
Less: Treasury Stock = (40,800 - 10500)	30300
Outstanding Shares	4,130,300
Retained Earnings
Balance	$4,597,000.00
Net Income	$2,107,000.00
Less:Preferred dividend = 189100 shares x $20 x 7%	-$264,740.00
Less: Common Dividend = 4130300 x $.50	-$2,065,150.00
Ending retained Earnings	$4,374,110.00