Stockholders' Equity:
On January 1, 2006, Fast Company had the following account balances in its shareholders' equity accounts.
Common stock, $1 par, 250,000 shares issued 250,000
Paid-in capital excess of par, common 500,000
Preferred stock, $100 par, 10,000 shares outstanding 1,000,000
Paid-in capital excess of par, preferred 100,000
Retained earnings 2,000,000
Treasury stock, at cost, 5,000 shares 25,000
During 2006, Fast Company had several transactions relating to common stock.
January 15:
Declared a property dividend of 100,000 shares of Slow Company, which were previously held by Fast Company as an investment on its books. (book value, $10 per share, market value $9 per share).
February 17: Distributed the property dividend (from Jan 15) to the stockholders.
April 10: A 3-for-1 stock split (not a stock dividend) was declared on outstanding common stock of Fast. The market value of Fast
Company's stock was $30 on this date.
July 18: Declared and distributed a 3% stock dividend on outstanding common stock of Fast when the market value per share was $5.
December 1: Declared a fifty cents per share cash dividend on the outstanding common shares.
December 20: Paid the cash dividend.
Required: Prepare the shareholders' equity section of Fast Company's balance sheet as of December 31, 2006. Assume net income is $500,000 for 2006.
Show the computation of each line item.