ACCT 1201 Chapter Notes - Chapter 11: Stock Split, Preferred Stock, Pro Rata
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22 Mar 2016
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Contributed capital from the sale of stock is the amount of money stockholders invest through the purchase of share. It is the sum of common stock and additional paid in capital (cid:1) Corporations are formed through a application to a state government. The state then issues a charter also called the articles of incorporations. Corporations are governed by a board of directors elected by the (cid:1) (cid:1) (cid:1) stockholders. The corporate charter specifies the maximum number of shares that can be sold to the public refered to as the authorized number of shares. Issued shares stock that has been sold to the public. Treasury stock is stock that a company bought back from the public. When companies buy back stock a difference is created between the number of issued shares and the number of outstanding shares currently held by individual stockholders: issues shares, less: treasury stock, outstanding shares (cid:1)
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Shelby Corporation was organized in January 2013 to operate anair conditioning sales and service business. The charter issued bythe state authorized the following capital stock: |
Common stock, $1 parvalue, 200,000 shares. |
Preferred stock, $10par value, 6 percent, 50,000 shares. |
During January andFebruary 2013, the following stock transactions werecompleted: |
a. | Collected $841,000 cash andissued 29,000 shares of common stock. |
b. | Issued 19,500 shares ofpreferred stock at $39 per share; collected in cash. |
Net income for 2013 was $59,000;cash dividends declared and paid at year-end were $10,000. |
Required: |
Prepare the stockholdersâ equity section of the balance sheet atDecember 31, 2013. This is what i have Contributed capital Preferred stock issued [19500*10] 195000 Additional preferred stock paid in capital [19500*29] 565500 Common stock issued [29000*1] 29000 Additional common stock paid in capital 812000 Total Contributed Capital 1601500 What are the retained earnings/net income and the total stockholders equity? Its not add: Net Income 59000 Less: dividends (10000) I tried that and it didnt work. where am I going wronghere? |