Question

Donnie Hilfiger has two classes of stock authorized: $1 parpreferred and $0.01 par value common. As of the beginning of 2015,200 shares of preferred stock and 2,500 shares of common stock havebeen issued. The following transactions affect stockholders’ equityduring 2015: March 1 Issues 1,000 shares of common stock for $27per share. May 15 Repurchases 600 shares of treasury stock for $20per share. July 10 Reissues 100 shares of treasury stock purchasedon May 15 for $25 per share. October 15 Issues 100 shares ofpreferred stock for $30 per share. December 1 Declares a cashdividend on both common and preferred stock of $1.00 per share toall stockholders of record on December 15. (Hint: Dividends are notpaid on treasury stock.) December 31 Pays the cash dividendsdeclared on December 1. Donnie Hilfiger has the following beginningbalances in its stockholders’ equity accounts on January 1, 2015:Preferred Stock, $200; Common Stock, $25; Additional Paid-inCapital, $61,000; and Retained Earnings, $23,000. Net income forthe year ended December 31, 2015, is $9,300. Taking intoconsideration all the transactions during 2015, respond to thefollowing for Donnie Hilfiger: Prepare the stockholders’ equitysection of the balance sheet as of December 31, 2015. Prepare thestatement of stockholders’ equity for the year ended December 31,2015.