Question

Problem 15-03

Kingbird Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders’ equity.

Preferred Stock, 152,800 shares		$ 3,056,000
Common Stock, 1,998,000 shares		9,990,000
Paid-in Capital in Excess of Par—Preferred Stock		200,000
Paid-in Capital in Excess of Par—Common Stock		26,724,000
Retained Earnings		4,571,000

The following transactions affected stockholders’ equity during 2021.

Jan. 1		27,600 shares of preferred stock issued at $24 per share.
Feb. 1		51,100 shares of common stock issued at $20 per share.
June 1		2-for-1 stock split (par value reduced to $2.50).
July 1		27,400 shares of common treasury stock purchased at $10 per share. Kingbird uses the cost method.
Sept. 15		9,400 shares of treasury stock reissued at $11 per share.
Dec. 31		The preferred dividend is declared, and a common dividend of 55¢ per share is declared.
Dec. 31		Net income is $2,076,000.

Prepare the stockholders’ equity section for Kingbird Company at December 31, 2021.

Answer 1

Stockholders' Equity
December 31, 2021
Capital Stock
Preferred Stock		3608000
Common Stock		10245500
Total Capital Stock		13853500
Additional Paid-in Capital
Paid-in Capital in Excess of Par - Common Stock	27490500
Paid-in Capital in Excess of Par - Preferred Stock	310400
Paid-in Capital from Treasury Stock	9400
		27810300
Total Paid-in Capital		41663800
Retained Earnings		4114250
Total Paid-in Capital and Retained Earnings		45778050
Less:
Treasury Stock		180000
Total Stockholders' Equity		45598050