The Squash Company's shareholders' equity on January 1, 2018 was $3,125,500. During 2018, Squash Company reported the following: Net income of $575,325.
Declared cash dividends totaling $125,000; the dividends had not been paid as of December 31, 2018
Issued 10,000 shares of $5 par value common stock at $9 per share.
Purchased 5,000 shares of its common stock for $9.75 per share; the shares are being held as treasury shares.
Sold 1,500 shares of treasury stock for $9.25 per share.
Required:Prepare the balance of shareholders' equity as of December 31, 2018.
What will be an ideal response?
| Beginning balance, January 1 | $ | 3,125,500 | ||
| + Net income | 575,325 | |||
| ? Dividends declared | (125,000 | ) | ||
| + Shares issued | 90,000 | (10,000 shares × $9 per share) | ||
| ? Treasury stock purchase | (48,750 | ) | (5,000 shares × $9.75 per share) | |
| + Sale of treasury stock | 13,875 | (1,500 shares × $9.25 per share) | ||
| Shareholders equity, December 31 | $ | 3,630,950 | ||
Business
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