Problem: (Equity Transactions and Statement Preparation) Amado Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2007, the following accounts were included in stockholder's equity.
The following transactions affected stockerholders' equity during 2007.
Jan. 1 25,000 shares of preferred stock ussed at $22 per share.
Feb.1 40,000 shares of common stock issued at $20 per share.
Jun. 1 2-for-1 stock split (par value reduced to $2.50).
Jul. 1 30,000 shares of common treasury stock purchased at $9 per share. Amado uses the cost method.
Sept. 15 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 Net income $2,100,000
Dec. 31 The preferred dividend is declared, and a common dividend of $0.50 per share is declared.
Instructions:
Prepare the stockholders' equity section for Amado Company at December 31, 2007. Share all supporting computations.