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.
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.
Related questions
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 instockholdersâ equity.
| Preferred Stock, 151,800 shares | $ 3,036,000 | |
| Common Stock, 2,120,000 shares | 10,600,000 | |
| Paid-in Capital in Excess of ParâPreferred Stock | 203,700 | |
| Paid-in Capital in Excess of ParâCommon Stock | 27,240,000 | |
| Retained Earnings | 4,547,000 |
The following transactions affected stockholdersâ 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 stockholdersâ equity section for Hatch Company atDecember 31, 2015.
