Question

Using the following accounts and balances, prepare the stockholders' equity section of the balance sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.

Common Stock, $50 par		$1,250,000
Paid-In Capital in Excess of Par		800,000
Paid-In Capital from Sale of Treasury Stock		42,000
Retained Earnings		4,350,000
Treasury Stock		155,000

Stockholders' Equity
Contributed capital:
	$
Total contributed capital		$
Total		$
Total stockholders' equity		$

Answer 1

Solution

Stockholders' Equity
Contributed capital:
Common Stock, $50 par	$1,250,000.00
Paid-In Capital in Excess of Par	$   800,000.00
Paid-In Capital from Sale of Treasury Stock	$       42,000.00
Total contributed capital		$2,092,000.00
Retained Earnings		$4,350,000.00
Total		$6,442,000.00
Less: Treasury Stock		$ (155,000.00)
Total stockholders' equity		$6,287,000.00

Treasury stock have a debit balance hence it is deducted from total stockholder's equity.