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. Eighty thousand shares of common stock are authorized, and 500 shares have been reacquired.

Answer 1

Explanation:

The preparation of  stockholder equity section of the balance sheet is shown below:

                                     Goodale Properties Inc.

                                      Equity section of Balance Sheet

                                             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