Question

The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year: Common Stock, $15 par $459,000 Paid-In Capital from Sale of Treasury Stock 18,800 Paid-In Capital in Excess of Par—Common Stock 12,240 Retained Earnings 720,000 Treasury Stock 9,500 Prepare the Stockholders’ Equity section of the balance sheet as of June 30 using Method 1 of Exhibit 8.

Answer 1

Answer:

Common Stock, $15 par                                    $459,000

Paid-In Capital in Excess of Par—Common Stock 12,240

Paid-In Capital from Sale of Treasury Stock          18,800

Retained Earnings                                                720,000

Treasury Stock                                                        (9,500)

Total equity                                                         1,200,540‬

Explanation:

The treasury stock decrease the equity as these represent common stock purhcased by the firm.

The paind-in capotal from sale represent the difference when selling thse treasury stock in favor of the company

Answer 2

Answer:

                                      Goodale Properties Inc.

                                       Balance Sheet (Portion)

                                              As at June 30

Stockholders' Equity

Paid-in Capital - Common Stock                                       $459,000

Paid-in Capital in excess of par - Common Stock           $12,240

Retained earnings                                                             $720,000

Treasury stock                                        $9,500

Less: Sale of Treasury stock                 ($18,800)

Net treasury stock                                                              ($9,300)

Net stockholders' equity                                                    $1,200,540      

Explanation:

Calculation of Net stockholders' equity:

Net stockholders' equity

= Paid-in Capital + Paid-in Capital in excess of par + Retained earnings - Net treasury stock

= $459,000 + $12,240 + $720,000 - [-$9,300]

= $459,000 + $12,240 + $720,000 + $9,300

= $1,200,540