Lending Branch, Inc. was incorporated as a new business on May 1, 2019. The company is authorized to issue 50,000 shares of $1 par common stock and 10,000 shares of 4%, $5 par cumulative, participating preferred stock. On May 1, 2019, the company issued 15,000 shares of common stock for $8 per share. Net income for the period ended December 31, 2019 ,was $115,000. Cash dividends in the amount of $30,000 were declared, but only $25,000 were paid as of year-end.

Prepare the stockholders' equity section of the balance sheet at December 31, 2019.

Question

Lending Branch, Inc. was incorporated as a new business on May 1, 2019. The company is authorized to issue 50,000 shares of $1 par common stock and 10,000 shares of 4%, $5 par cumulative, participating preferred stock. On May 1, 2019, the company issued 15,000 shares of common stock for $8 per share. Net income for the period ended December 31, 2019 ,was $115,000. Cash dividends in the amount of $30,000 were declared, but only $25,000 were paid as of year-end.
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Prepare the stockholders' equity section of the balance sheet at December 31, 2019.

Quizplus · Accepted Answer

The Answer of Lending Branch, Inc. was incorporated as a new business on May 1, 2019. The company is authorized to issue 50,000 shares of $1 par common stock and 10,000 shares of 4%, $5 par cumulative, participating preferred stock. On May 1, 2019, the company issued 15,000 shares of common stock for $8 per share. Net income for the period ended December 31, 2019 ,was $115,000. Cash dividends in the amount of $30,000 were declared, but only $25,000 were paid as of year-end.
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Prepare the stockholders' equity section of the balance sheet at December 31, 2019.