Question

Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following:

 

Common stock, $9 par value, 108,000 shares authorized

Preferred stock, 10 percent, par value $14 per share, 5,100 shares authorized

 

During the year, the following transactions took place in the order presented:

 

1. Sold and issued 21,500 shares of common stock at $28 cash per share.
2. Sold and issued 1,600 shares of preferred stock at $32 cash per share.
3. At the end of the year, the accounts showed net income of $40,000. No dividends were declared.

 

Required:

1. Prepare the stockholders’ equity section of the balance sheet at the end of the year.