EX 13-16 Stockholders’ equity section of balance sheet

Furious and Fast Car Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Furious and Fast Car Inc. on November 30, the end of the current year:


Common Stock, $8 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000,000
Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . 525,000
Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 280,000
Paid-In Capital from Sale of Treasury Stock—Common . . . . . . . . . . . . . . . . . . . 175,000
Preferred 2% Stock, $125 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,120,000
Treasury Stock—Common . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792,000


Sixty thousand shares of preferred and 500,000 shares of common stock are authorized. There are 88,000 shares of common stock held as treasury stock.

Prepare the Stockholders’ Equity section of the balance sheet as of November 30, the end of the current year.


Answer:

Stockholders’ Equity
Paid-in capital:
 Preferred 2% stock, $125 par
(60,000 shares authorized,
40,000 shares issued) ............... $5,000,000
 Excess of issue price over par ...... 280,000 $ 5,280,000
 Common stock, $8 par
(500,000 shares authorized,
375,000 shares issued) ............. $3,000,000
 Excess of issue price over par ...... 525,000 3,525,000
 From sale of treasury stock ........... 175,000
 Total paid-in capital................... $ 8,980,000
Retained earnings ................................ 23,120,000
 Total ................................................. $ 32,100,000
Deduct treasury common stock
(88,000 shares at cost) ................... 792,000
Total stockholders’ equity................... $31,308,000

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