Shown below is the stockholders' equity section of Powell's balance sheet at December 31, Year 1:
In Year 2, the following events occurred:
Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell's stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000.
Powell issued 4,500 shares out of 10,000 shares authorized of 6% cumulative preferred stock, $100 par value, for $106 per share.
The board of directors declared a dividend of $1.25 per share on the common stock. Powell's net income for Year 2 was $675,000.
Instructions
Complete in good form the stockholders' equity section of a balance sheet prepared for Powell at December 31, Year 2.

Question

Shown below is the stockholders' equity section of Powell's balance sheet at December 31, Year 1:
  In Year 2, the following events occurred:
Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell's stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000.
 Powell issued 4,500 shares out of 10,000 shares authorized of 6% cumulative preferred stock, $100 par value, for $106 per share.
The board of directors declared a dividend of $1.25 per share on the common stock. Powell's net income for Year 2 was $675,000.
Instructions
Complete in good form the stockholders' equity section of a balance sheet prepared for Powell at December 31, Year 2.

Quizplus · Accepted Answer

The Answer of Shown below is the stockholders' equity section of Powell's balance sheet at December 31, Year 1:
  In Year 2, the following events occurred:
Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell's stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000.
 Powell issued 4,500 shares out of 10,000 shares authorized of 6% cumulative preferred stock, $100 par value, for $106 per share.
The board of directors declared a dividend of $1.25 per share on the common stock. Powell's net income for Year 2 was $675,000.
Instructions
Complete in good form the stockholders' equity section of a balance sheet prepared for Powell at December 31, Year 2.

Shown Below Is the Stockholders' Equity Section of Powell's Balance