Question

Nautical has two classes of stock authonized: $10 par preferred, and $1 par value common. As of the beqinning of 2018, 1500 shares of preferred stock and 2,500 shares of common stock have been issued. The following transactions affect stockholders' equity during 2018: hare Aprl 1 Issue 150 additional shares of preferred stock for $35 ner share $075 per share to. stockholders of record on June 15 June 1 Declare a cash dividend on both common and preferred stock June 30 Pay the cash dividends declared on June 1 ctobor 1 Roiccuo 15/) sharos of troasury stock purchased on August 1 for $19 per share its stockholders equity accounts on January 1, 2018, Preferred Stock, $1.500, Common Stock, $2.500, Additional Paid-in Capital. $19.000, and Retained Earnings, $11.000, Net income l Desamher 31 2018 is $7400 Taking into consideration the beginning balances on January 1, 2018 and l the transactions during 2018, respond to the following for Nautical:

a.)Prepare the stockholders’ equity section of the balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
b.) Prepare the statement of stockholders’ equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Statement showing Stockholder Equity
	Preferred stock	common stock	additional paid in capital	retained earning	treasury stock	total stockholders equity
Balance jan1	$                1,500	$                2,500	$              19,000	$              11,000	$               -	$                       34,000
	(150X $10)	(2500X $1)
issue common stock		$                2,500	$              47,500			$                       50,000
		(2500X$1)	(2500X$19)
issue preferred stock	$                1,500		$                3,750			$                         5,250
	(150X $10)		(150X$25)
cash dividend				$              (3,975)		$                       (3,975)
				=(150+2500+2500+150)*0.75
purchase treasury stock					$        4,250	$                       (4,250)
					(250X$17)
reissue treasury stock			$                    300		$      (2,550)	$                         2,850
			(2X150)		(150X17)
net income				$                7,400		$                         7,400
balance dec 31	$                3,000	$                5,000	$              70,550	$              14,425	$      (1,700)	$                       91,275

Part-2
preferred stock	$                3,000
common stock	$                5,000
Additional paid in capital	$              70,550
total paid in capital	$              78,550
retained earning	$              14,425
treasury stock	$              (1,700)
total stockholders equity	$              91,275