Account for treasury stock using cost method

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Reference no: EM13155592

The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2010.

In 2010, 15000 shares were authorized and 7000 shares of common stock ($50 par value) were issued at at price of $57. In 2011, 1000 shares were issued as a stock dividend when the stock was selling for $60. Three hundred shares of common stock were bought in 2012 at a cost of $64 per share. These 300 shares are still in the company treasury.

In 2011, 10000 preferred shares were authorized and the company issued 5000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4700 more than it cost the company.

The corporation has earned a total of $610000 in net income after income taxes and paid out a total of $312600 in cash dividends since incorporation.

Instructions:

Prepare the stockholder's equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 2012. Account for treasury stock using the cost method.

Reference no: EM13155592

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