Question

Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year: $960,000 Common Stock, $10 par 72,400 Paid In Capital from Sale of Treasury Stock-Common Paid In Capital in Excess of Par-Common Stock 288,000 Paid-In Capital in Excess of Par-Preferred Stock 74,400 Preferred 4% Stock, $50 par 1,240,000 3,214,500 Retained Earnings Treasury Stock-Common 46,200 One hundred thousand shares of preferred and 400,000 shares of common stock are authorized. There are 4,200 shares of common stock held as treasury stock. Prepare the stockholders' Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 8 Specialty Auto Racing Inc Stockholders' Equity July 31, 20XX Paid-In Capital:

Answer 1

Prepare stockholders' equity section as follows: Bc Amount Amount Particulars 2 Paid in capital 3 Preferred 4% stock, $50 par 4 Paid-in Capital in excess of Par-Preferred Stock 5 Common stock, $10 par; 400,000 shares authorized, 96000 issued 6 Paid-In Capital in Excess of Par-Common Stock 7 Sale of Treasury stock - Common 8 Total Paid in capital 9 Retained Earnings 10 Total 11 Treasury Stock-Common 12 Total Shareholders' equity $ 12,40,000 $ 74.400 $13,14,400 $ 9,60,000 $ 2.88,000 $12,48.000 $ 72,400 $ 26,34,800 $32,14,500 $58,49,300 $ -46,200 $58,03,100