Record stock transactions, prepare equity section of balance sheet, and calculate ratios.
On January 1, 2007, the Expedite Corporation's shareholders' equity account balances were as follows.
Preferred stock (6%, $100 par noncumulative,
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25,000 shares authorized)
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$ 500,000
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Common stock ($5 par value, 8,000,000 shares authorized)
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4,500,000
|
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Additional paid-in capital, preferred stock
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20,000
|
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Additional paid-in capital, common stock
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6,300,000
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Retained earnings
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20,380,000
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Treasury stock-common (5,000 shares, at cost)
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70,000
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During 2007, Expedite Corporation engaged in the following transactions.
Jan. 5
Feb. 9
June 1
Dec. 1
Issued 10,000 shares of common stock for $15 per share Purchased 2,000 additional shares of common treasury stock at $13 per share
Declared the annual cash dividend on preferred stock, payable June 30 Declared a $0.25 per share cash dividend to common stockholders payable December 31, 2007
Net income for the year was $2,330,000.
Required
a. Show each of the transactions in the accounting equation.
b. Prepare the shareholders' equity section of the balance sheet at December 31.