The following accounts appear in the ledger of Polzin Inc. after the books are c

Question

The following accounts appear in the ledger of Polzin Inc. after the books are closed at December 31, 2014.

Prepare the stockholders’ equity section at December 31, assuming $100,000 of retained earnings is restricted for plant expansion.

Common Stock (no-par, $1 stated value, 400,000 shares authorized, 250,000 shares issued) $ 250,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,200,000 Preferred Stock ($50 par value, 8%, 40,000 shares authorized, 14,000 shares issued) 700,000 Retained Earnings 920,000 Treasury Stock (9,000 common shares) 64,000 Paid-in Capital in Excess of Par Value—Preferred Stock 24,000

Explanation / Answer

Prepare the stockholders’ equity section at December 31

Paid in capital Common Stock (no-par, $1 stated value, 400,000 shares authorized, 250,000 shares issued) 250000 Paid-in Capital in Excess of Stated Value—Common Stock 1200000 Preferred Stock ($50 par value, 8%, 40,000 shares authorized, 14,000 shares issued) 700000 Paid-in Capital in Excess of Par Value—Preferred Stock 24000 Total paid in capital 2174000 Retained earnings 920000 Total 3094000 Less: Treasury Stock -64000 Total Stockholder's equity 3030000

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