P13-3 (Equity Transactions and Statement Preparation) Amado Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2007, the following accounts were included in stockholder's equity. Preferred stock, 150,000 shares 3,000,000 Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par - Preferred 200,000
Paid-in Capital in Excess of Par - Common 27,000,000
Retained Earnings 4,500,000
The following transactions affected stockholders' equity during 2007.
Jan. 1 25,000 shares of preferred stock issued at $22 per share.
Feb.1 40,000 shares of common stock issued at $20 per share.
Jun. 1 2-for-1 stock split (par value reduced to $2.50).
Jul. 1 30,000 shares of common treasury stock purchased at $9 per share. Amado uses the cost method.
Sept. 15 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 Net income $2,100,000
Dec. 31 The preferred dividend is declared, and a common dividend of $0.50 per share is declared.
Prepare the stockholders' equity section for Amado Company at December 31, 2007. Share all supporting computations
This solution is comprised of a detailed explanation to prepare the stockholders' equity section for Amado Company.