Reference no: EM132248491

Question - Maplewood Inc. is a public corporation whose shares are traded in the over-the-counter market. At December 31, 2015, Maplewood had 5,000,000 authorized shares of $10 par value common stock, of which 1,900,000 shares were issued and outstanding. The shareholders' equity accounts at December 31, 2015, had the following balances:

Common stock 19,000,000

Additional paid-in capital on common stock 7,000,000

Retained earnings 6,200,000

Transactions during 2016 and other information relating to the shareholders' equity accounts were as follows:

1. On January 3, 2016, Maplewood issued 90,000 shares of $50 par value, 8%, cumulative convertible preferred stock at $52 per share. Each share is convertible into 2 shares of common stock. Maplewood had 700,000 authorized shares of preferred stock.

2. On February 6, 2016, Maplewood reacquired 19,000 of its common stock for $15 per share. Maplewood uses the cost method to account for treasury stock.

3. On April 22, 2016, Maplewood sold 400,000 (previously unissued) of $10 per common stock to the public at $16 per share.

4. On June 18, 2016, Maplewood declared a cash dividend of $1 per share of common stock, payable on July 13, 2016, to shareholders of record on July 2, 2016.

5. On November 9, 2016, Maplewood sold 10,000 shares of treasury stock for $20 per share.

6. On December 14, 2016, Maplewood declared a yearly cash dividend on preferred stock, payable on January 14, 2017, to shareholders of record on December 31, 2016.

7. On January 18, 2017, before the books were closed for 2016, Maplewood became aware that the ending inventories at December 31, 2015, were understated by $300,000 (the after-tax effect on 2015 net income was $210,000). The appropriate correcting entry was recorded the same day.

8. After correcting the beginning inventory, net income for 2016 was $4,000,000.

Required - Prepare the shareholders' equity section of Maplewood's balance sheet at December 31, 2016.