Question

Power Drve Corponstior desgns and produces a line of goit equipment and geit accarek Power Drive h has 100,000 shanes of common stock outstanding as of the beginning of a018.Power Deive has the tolowing ransactos afecting stockholders oquity in 2018 March 1 ssues 65,000 additional shares of $1 par valua common stock for $62 per May 10 Repuchases 6.000 shares of reasury stock for 565 per shane July 1 Pays the cash dvidend decliared on June t Octbber 21 Ressues 3.000 shares of treasury stock purchased on May 10 for $70 per share beginning balances in s stockholds qjuity aocounts on Jnuary 1.2018 Conmon Stock $100.000: Additonal Paid-in Capital. $5.50o.o an Retained Earnings $3,000,000. Net income for ihe year ended December 3, 2018, is $7o0,000 Required Prepare the stanement of sockholders' equity for Power Crive Corporation for the year ended December 31 2018 (Amounts to be ceducted shouid be indicaned by a minus sign talement of Equity the Year Ended December 31, 201 RetainedT Treasury Stock s

Answer 1

POWER DRIVE CORPORATION
Statement of Stockholder’s equity
For the year ended December 31,2018
	Common Stock	Additional Paid-in-capital	Retained Earnings	Treasury stock	Total Stockholder’s equity
Balance, January 01	$100000	$5500000	$3000000	$0	$8600000
Issued Common Stock	65000*$1 = $65000	65000*$(52 -1) = 65000*$51 = $3315000			$3380000
Purchase treasury stock				6000*$65 = ($390000)	($390000)
Dividends			165000*$2 = ($330000)		($330000)
Sale of treasury stock				3000*$70 = $210000	$210000
Net income			$700000		$700000
Balance December 31	$165000	$8815000	$3370000	($180000)	$12170000