Question

The ledger of Pronghorn Corp at December 31, 2022, after the books have been closed, contains the following stockholders’ equity accounts.

Preferred Stock (11,200 shares issued)		$1,153,600
Common Stock (302,000 shares issued)		2,114,000
Paid-in Capital in Excess of Par Value—Preferred Stock		165,000
Paid-in Capital in Excess of Stated Value—Common Stock		1,620,000
Retained Earnings		2,710,500

A review of the accounting records reveals this information:

1.		Preferred stock is 9%, $103 par value, noncumulative. Since January 1, 2021, 11,200 shares have been outstanding; 22,400 shares are authorized.
2.		Common stock is no-par with a stated value of $7 per share; 604,000 shares are authorized.
3.		The January 1, 2022, balance in Retained Earnings was $2,282,000.
4.		On October 1, 69,000 shares of common stock were sold for cash at $10 per share.
5.		A cash dividend of $392,500 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2021.
6.		Net income for the year was $821,000.
7.		On December 31, 2022, the directors authorized disclosure of a $162,000 restriction of retained earnings for plant expansion. (Use Note A.)

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

Answer 1

Pronghorn Corp
Stockholders Equity section of Balance Sheet
As of Dec 31, 2022
Stockholders Equity
Paid in capital
Capital Stock
9% Preferred Stock - $103 par value (22,400 shares authorized, 11,200 shares issued & outstanding)	1,153,600
Common Stock - $7 stated value (604,000 shares authorized, 302,000 shares issued & outstanding)	2,114,000
Total Capital Stock		3,267,600
Additional Paid in capital
Paid in Capital in Excess of Par Value-Preferred Stock	165,000
Paid in Capital in Excess of Stated Value-Common Stock	1,620,000
Total Additional Paid in Capital		1,785,000
Total Paid in Capital		5,052,600
Retained Earnings ($162,000 restricted for plant expansion)		2,710,500
Total Stockholders Equity		7,763,100