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For the Current Year Ended, ABC Had the Following Transactions

Question 159

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For the current year ended, ABC had the following transactions:
- Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.
- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
- Reported net income of $200,000.
- Declared and paid a total dividend of $40,000.
Assume that retained earnings had a beginning balance of $75,000.
The company does not have any stock outstanding as of the beginning of the current year.

Premises:

Responses:

$150,000

Treasury stock

$100,000

Retained earnings

$60,000

Preferred stock

$20,000

Excess of issue price over par (preferred)

$235,000

Common stock

$330,000

Total paid-in capital

$550,000

Excess of issue price over par (common)

$15,000

Total stockholders' equity

Premises:

$150,000

$100,000

$60,000

$20,000

$235,000

$330,000

$550,000

$15,000

Responses:

Treasury stock

Retained earnings

Preferred stock

Excess of issue price over par (preferred)

Common stock

Total paid-in capital

Excess of issue price over par (common)

Total stockholders' equity

Correct Answer:

Premises:

Responses:

$150,000

$100,000

$60,000

$20,000

$235,000

$330,000

$550,000

$15,000