Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $.01 par value common. As of the beginning of 2012, 150 shares of preferred stock and 3,780 shares of common stock have been issued. The following transactions affect stockholders' equity during 2012: Mar. 1 Issues 1,100 shares of common stock for $40 per share. May 15 Repurchases 670 shares of treasury stock for $20 per share. Jul. 10 Reissues 110 shares of treasury stock purchased on May 15 for $24 per share. Oct. 15 Issues 80 shares of preferred stock for $44 per share. Dec. 1 Declares a cash dividend on both common and preferred stock of $.80 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.) Dec. 31 Pays the cash dividends declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2012: Preferred Stock, $150; common Stock, $37.80; Additional Paid-in Capital, $76,000; and Retained Earnings, $25,500. Net income for the year ended December 31, 2012, is $9,100.
Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $.01 par value common. As of the beginning of 2012, 150 shares of preferred stock and 3,780 shares of common stock have been issued. The following transactions affect stockholders' equity during 2012: Mar. 1 Issues 1,100 shares of common stock for $40 per share. May 15 Repurchases 670 shares of treasury stock for $20 per share. Jul. 10 Reissues 110 shares of treasury stock purchased on May 15 for $24 per share. Oct. 15 Issues 80 shares of preferred stock for $44 per share. Dec. 1 Declares a cash dividend on both common and preferred stock of $.80 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.) Dec. 31 Pays the cash dividends declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2012: Preferred Stock, $150; common Stock, $37.80; Additional Paid-in Capital, $76,000; and Retained Earnings, $25,500. Net income for the year ended December 31, 2012, is $9,100.
Related questions
Problem 1
Sweet Sixteen has two classes of stock authorized: $100 par preferred and $1 par value common. As of the beginning of 2012, 1,000 shares of preferred stock have been issued and 20,000 shares of common stock have been issued. The following transactions affect stockholdersâ equity during 2012:
March 1 Issue 3,000 additional shares of common stock for $22 per share.
April 1 Issue 5,000 additional shares of preferred stock for $110 per share.
June 1 Declare a cash dividend on common stock of $1 per share and a cash dividend on preferred stock of $5 per share to all stockholders of record on June 15.
June 30 Pay the cash dividends declared on June 1.
August 1 Repurchase 2,000 shares of common treasury stock for $18 per share.
October 1 Reissue 1,000 shares of treasury stock purchased on August 1 for $20 per share.
Sweet Sixteen has the following beginning balances in its stockholdersâ equity accounts on January 1, 2012: preferred stock, $100,000, common stock, $20,000; paid-in capital, $380,000; and retained earnings, $450,000. Net income for the year ended December 31, 2012, is $65,000.
Required:
1. Record each of these transactions.
2. Indicate whether each of these transactions would increase (+), decrease (â), or have no effect (NE) on total assets, total liabilities, and total stockholdersâ equity by completing the following chart.
| Transaction | Total Assets | Total Liabilities | Total Stockholdersâ Equity |
| Issue common stock | |||
| Issue preferred stock | |||
| Declare cash dividends | |||
| Pay cash dividends | |||
| Repurchase treasury stock | |||
| Reissue treasury stock |
3. Prepare the stockholdersâ equity section of the balance sheet as of December 31, 2012.
4. Prepare the statement of stockholdersâ equity for the year ended December 31, 2012.
5. Explain how items 3 and 4 are similar and how they are different.
