To prepare the Stockholders' Equity section of the balance sheet for Goodale Properties Inc. as of June 30 using Method 1, you'll need to consider the information provided. Method 1 typically involves presenting Common Stock at par value and then showing any additional paid-in capital and retained earnings.
Here's how you can calculate the Stockholders' Equity section:
1. Calculate the Common Stock at par value:
Common Stock at par value = Number of shares issued x Par value per share
Common Stock at par value = $3,060,000 (given)
2. Calculate the Paid-In Capital from Sale of Treasury Stock:
Paid-In Capital from Sale of Treasury Stock = $115,000 (given)
3. Calculate the Paid-In Capital in Excess of Par—Common Stock:
Paid-In Capital in Excess of Par—Common Stock = Total Stockholders' Equity - Common Stock at par value - Paid-In Capital from Sale of Treasury Stock
Paid-In Capital in Excess of Par—Common Stock = ($3,060,000 + $115,000) - $3,060,000 - $115,000 = $0
4. Calculate the Retained Earnings:
Retained Earnings = $20,553,000 (given)
5. Calculate the Treasury Stock:
Treasury Stock = $324,000 (given)
Now, you can prepare the Stockholders' Equity section of the balance sheet:
**Stockholders' Equity**
- Common Stock ($45 par value): $3,060,000
- Paid-In Capital from Sale of Treasury Stock: $115,000
- Paid-In Capital in Excess of Par—Common Stock: $0
- Retained Earnings: $20,553,000
- Less: Treasury Stock: ($324,000)
**Total Stockholders' Equity**: $22,404,000
This is how you would present the Stockholders' Equity section on the balance sheet using Method 1.