Hatch company has two classes of capital stock outstanding: 8%, $20

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Hatch Company has two classes of capital stock outstanding:  8%, $20 par preferred and $5 par common.  At December 31, 2010, the following accounts were included in stockholders’ equity.

 

 

Preferred Stock, 150,000 shares                    3,000,000

Common Stock, 2,000,000 shares               10,000,000

Paid-in Capital in Excess of Par—Preferred       200,000

Paid-in Capital in Excess of Par—Common   27,000,000

Retained Earnings                                    4,500,000

 

 

The following transactions affected stockholders’ equity during 2011.

 

Jan. 1    30,000 shares of preferred stock issued at $22 per share

 

Feb. 1    50,000 shares of common stock issued at $20 per share

 

June 1    2-for-1 stock split (par value reduced to $2.50)

 

July 1     30,000 shares of common treasury stock purchased at $10 per share Hatch uses the cost method

 

Sept. 15   10,000 shares of treasury stock reissued at $11 per share

 

Dec. 31    The preferred dividend is declared, and a common dividend of 50¢ per share is declared.

 

Dec. 31     Net income is $2,100,000.

 

 

 

 

Required:

 

Prepare the stockholders’ equity section for Hatch Company at December 31, 2010. Show all supporting computations.

 

The post Hatch company has two classes of capital stock outstanding: 8%, $20 appeared first on Australia Assessments.

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