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    Stockholders' Equity section

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    On January 1, 2007, Rothchild Inc. had these stockholders' equity balances.
    Common Stock, $1 par (2,000,000 shares authorized,
    800,000 shares issued and outstanding) $800,000
    Paid-in Capital in Excess of Par Value 1,500,000
    Retained Earnings 600,000

    During 2007, the following transactions and events occurred.
    1. Issued 50,000 shares of $1 par value common stock for $3 per share.
    2. Issued 40,000 shares of common stock for cash at $4 per share.
    3. Purchased 15,000 shares of common stock for the treasury at $3.50 per share.
    4. Declared and paid a cash dividend of $115,000
    5. Earned net income of $300,000

    Prepare the stockholders' equity section of the balance sheet at December 31, 2007.

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    Solution Summary

    The solution explains how to prepare the Stockholders' Equity section of the balance sheet.