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Problem 15-3

Hatch Company has two classes of capital stock outstanding: 7%,$20 par preferred and $5 par common. At December 31, 2014, thefollowing accounts were iHatch Company has two classes of capitalstock outstanding: 7%, $20 par preferred and $5 par common. AtDecember 31, 2014, the following accounts were included instockholders’ equity.

Preferred Stock, 151,800 shares $ 3,036,000
Common Stock, 2,120,000 shares 10,600,000
Paid-in Capital in Excess of Par—Preferred Stock 203,700
Paid-in Capital in Excess of Par—Common Stock 27,240,000
Retained Earnings 4,547,000


The following transactions affected stockholders’ equity during2015.

Jan. 1 40,300 shares of preferred stock issued at $22 per share.
Feb. 1 53,500 shares of common stock issued at $21 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 39,700 shares of common treasury stock purchased at $9 pershare. Hatch uses the cost method.
Sept. 15 10,600 shares of treasury stock reissued at $11 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of55¢ per share is declared.
Dec. 31 Net income is $2,279,000.


Prepare the stockholders’ equity section for Hatch Company atDecember 31, 2015.

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Trinidad Tremblay
Trinidad TremblayLv2
28 Sep 2019
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Related questions

P15.3 (LO 1, 2, 3, 4) (Equity Transactions and Statement Preparation) Hatch Company has two
classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the
following accounts were included in stockholders’ equity.
Preferred Stock, 150,000 shares $ 3,000,000
Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par—Preferred Stock 200,000
Paid-in Capital in Excess of Par—Common Stock 27,000,000
Retained Earnings 4,500,000
The following transactions aff ected stockholders’ equity during 2021.
Jan. 1 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 50,000 shares of common stock issued at $20 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost
method.
Sept. 15 10,000 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 $2,100,000.
Instructions
Prepare the stockholders’ equity section for Hatch Company at December 31, 2021. Show all supporting
computations.

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:

Preferred 2% Stock, $75 par (100,000 shares authorized, 80,000 shares issued) $6,000,000

Paid-In Capital in Excess of Par—Preferred Stock 420,000

Common Stock, $8 par (5,000,000 shares authorized, 3,000,000 shares issued) 24,000,000

Paid-In Capital in Excess of Par—Common Stock 1,850,000

Retained Earnings 115,400,000

During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:

Jan. 5 Issued 400,000 shares of common stock at $11, receiving cash.

Feb. 10 Issued 5,000 shares of preferred 2% stock at $90.

Mar. 19 Purchased 150,000 shares of treasury common for $10 per share.

May 16 Sold 80,000 shares of treasury common for $13 per share.

Aug. 25 Sold 20,000 shares of treasury common for $9 per share.

Dec. 6 Declared cash dividends of $1.50 per share on preferred stock and $0.06 per share on common stock.

31 Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares $3,300,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares 1,885,000 Paid-in capital in excess of par—preferred 96,000 Paid-in capital in excess of par—common 825,000 Retained earnings 2,920,000 $9,026,000 The following events occurred during 2016: Jan. 5 10,500 shares of authorized and unissued common stock were sold for $7 per share. 16 10,000 shares of authorized and unissued preferred stock were sold for $108 per share. Apr. 1 79,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superior uses the cost method to account for treasury stock. Sept. 1 3,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share. Dec. 1 24,000 shares of treasury stock are reissued at a price of $24 per share. Required: 1. Prepare journal entries for each of the above transactions. 2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2016. 3. Calculate Superior’s legal capital at December 31, 2016.

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