The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Sarasota Corp. at December 31, 2022.

Common Stock ($2 stated value) $2,400,000
Paid-in Capital in Excess of Par Value—Preferred Stock 67,500
Paid-in Capital in Excess of Stated Value—Common Stock 1,575,000
Preferred Stock (5%, $100 par, noncumulative) 900,000
Retained Earnings 2,001,000
Treasury Stock (18,000 common shares) 108,000

Prepare the stockholders’ equity section of the balance sheet at December 31, 2022.

                                               Stockholders' equity  

Paid in capital  

Capital stock  

5% preferred stock, $100 par value, noncumulative, 9,000 shares are issued and outstanding $900,000

Common stock, no par, $2 stated value, $2,400,000

Total capital stock  $3,300,000 (A)

Additional paid-in capital  

Paid-in Capital - in Excess of Par Value $67,500

Paid-in Capital in Excess of Stated Value - Common Stock  $1,575,000

Total additional paid in capital  $1,642,500 (B)

Total paid in capital  $4,942,500 (A + B)

Add: Retained earnings  $ 2,001,000

Total paid in capital & retained earnings  $6,943,000

Less: Treasury stock (18,000 common shares)  $(108,000)

Total stockholders' equity  $6,835,500

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Answer and Explanation:

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

                                                Stockholders' equity  

Paid in capital  

Capital stock  

5% preferred stock, $100 par value, noncumulative, 9,000 shares are issued and outstanding$900,000

Common stock, no par, $2 stated value, $2,400,000

Total capital stock  $3,300,000 (A)

Additional paid in capital  

Paid-in Capital in Excess of Par Value$67,500

Paid-in Capital in Excess of Stated Value - Common Stock  $1,575,000

Total additional paid in capital  $1,642,500 (B)

Total paid in capital  $4,942,500 (A + B)

Add: Retained earnings  $ 2,001,000

Total paid in capital and retained earnings  $6,943,000

Less: Treasury stock (18,000 common shares)  $(108,000)

Total stockholders' equity  $6,835,500

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