The preparation of the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2024, is as follows:
Power Drive Corporation
<h3>Stockholders' Equity Section</h3>
As of December 31, 2024
Common Stock, 163,000 shares at $1 par value $163,000
Treasury Stock, 2,900 shares at $1 par value (2,900)
Additional Paid-in Capital 8,851,700
Retained Earnings 3,081,400
Total equity $12,093,200
<h3>Data and Calculations:</h3>
Beginning balances in stockholders' equity accounts on January 1, 2024:
Common Stock, $100,000
Additional Paid-in Capital, $5,300,000
Retained Earnings, $2,800,000
Net income for the year ended December 31, 2024, = $680,000
<h3>Transaction Analysis:</h3>
March 1 Cash $3,780,000 Common Stock $63,000 Additional Paid-in Capital $3,717,000
May 10 Treasury Stock $5,800 Additional Paid-in Capital $359,600 Cash $365,400
June 1 Cash dividend $398,600 ($1.90 x 157,200) Dividends Payable $398,600
July 1 Dividends Payable $398,600 Cash $398,600
October 21 Cash $197,200 Treasury Stock $2,900 Additional Paid-in Capital $194,300
<u>Summary Accounts</u>
<h3>Retained Earnings Statement:</h3>
Beginning balance $2,800,000
Net income 680,000
Dividends (398,600)
Ending balance $3,081,400
<h3>Common Stock:</h3>
Beginning balance $100,000
March 1 Cash 63,000
Ending balance $163,000
<h3>Additional Paid-in Capital, </h3>
Beginning balance $5,300,000
March 1 Cash 3,717,000
May 10 Cash (359,600)
Oct. 21 Cash 194,300
Ending balance $8,851,700
<h3>Treasury Stock:</h3>
May 10 Cash $5,800
Oct. 21 Cash (2,900)
Ending balance $2,900
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