Corporate Finance Assignment/ Professional Essay Writers
The post-closing trial balance of Ferretti Corporation at December 31, 2010, contains these stockholdersâ€™ equity accounts.
Preferred Stock (8,000 shares issued) â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦$400,000
Common Stock (350,000 shares issued) â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦…3,500,000
Paid-in Capital in Excess of Par Valueâ€” Preferred Stock â€¦â€¦â€¦…250,000
Paid-in Capital in Excess of Par Valueâ€” Common Stock â€¦â€¦â€¦…700,000
Retained Earnings â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦915,000
A review of the accounting records reveals this information:
1. Preferred stock is $50 par, 10%, and cumulative; 8,000 shares have been outstanding since January 1, 2009.
2. Authorized stock is 20,000 shares of preferred and 500,000 shares of common with a $10 par value.
3. January 1, 2010, balance in Retained Earnings was $660,000.
4. On July 1, 20,000 shares of common stock were sold for cash at $16 per share.
5. A cash dividend of $220,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2009.
6. Net income for the year was $475,000.
7. On December 31, 2010, the directors authorized disclosure of a $150,000 restriction of retained earnings for plant expansion. (Use Note X.)
(a) Reproduce the retained earnings account for the year.
(b) Prepare the stockholdersâ€™ equity section of the balance sheet at December 31. Get FInance Help Today