Question: Refer to the information in E10-6. In its first year of operations, Finishing Touches has income of $150,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $1,600 on all preferred shares outstanding.
Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2012.
E10-6: Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2012, its first year of operations:
January 2 Issues 100,000 shares of common stock for $25 per share.
February 6 Issues 2,000 shares of 8% preferred stock for $12 per share.
September 10 Repurchases 10,000 shares of its own common stock for $30 per share.
December 15 Reissues 5,000 shares of treasury stock at $35 per share.
Required: Record each of these transactions.