Reference no: EM132681840

Question - Sweet Sixteen has the following beginning balances in its stockholders' equity accounts on January 1, 2021: preferred stock, $100,000, common stock, $20,000; additional paid-in capital, $380,000; and retained earnings, $450,000. Net income for the year ended December 31, 2021, is $65,000. The following transactions affected stockholders' equity during 2021:

March 1 Issues 3,000 additional shares of $1 par value common stock for $22 per share. April 1 Issues 5,000 additional shares of $100 par value preferred stock for $110 per share. June 1 Declares a cash dividend on common stock of $1 per share and a cash dividend on preferred stock of $5 per share to all stockholders of record on June 15. June 30 Pays the cash dividends declared on June 1.August 1 Purchases 2,000 shares of common treasury stock for $18 per share. October 1 Resells 1,000 shares of treasury stock purchased on August 1 for $20 per share.

Taking into consideration the beginning balances and all the transactions during 2021, respond to the following for Sweet Sixteen:

Required -

1. Prepare the statement of stockholders' equity for the year ended December 31, 2021.

2. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021.