(Stockholders’ Equity Section) Bruno Corporation’s post-closing trial balance at December 31, 2017, is shown as follows.

BRUNO CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2017
	Dr.	Cr.
Accounts payable		\( 310,000
Accounts receivable	\) 480,000
Accumulated depreciation—buildings		185,000
Additional paid-in capital in excess
of par—common		1,300,000
From treasury stock		160,000
Allowance for doubtful accounts		30,000
Bonds payable		300,000
Buildings	1,450,000
Cash	190,000
Common stock (\(1 par)		200,000
Dividends payable (preferred stock—cash)		4,000
Inventory	560,000
Land	400,000
Preferred stock (\)50 par)		500,000
Prepaid expenses	40,000
Retained earnings		301,000
Treasury stock (common at cost)	170,000
Totals	\(3,290,000	\)3,290,000

At December 31, 2017, Bruno had the following number of common and preferred shares.
	Common	Preferred
Authorized	600,000	60,000
Issued	200,000	10,000
Outstanding	190,000	10,000

The dividends on preferred stock are \(4 cumulative. In addition, the preferred stock has a preference in liquidation of \)50 per share.

Instructions

Prepare the stockholders’ equity section of Bruno’s balance sheet at December 31, 2017.

Step by step solution

01

Meaning of Stockholders’ Equity

Stockholders' equity can be term as the value of the assets owned by investors after deducting their liabilities. In addition to being known as shareholder equity, it is also called the book value of a company.

02

Preparing the Stockholders’ Equity Section

BRUNO CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2017
Capital Stock Preferred stock,$4 cumulative, par value $50 Per-share; authorized 60,000 shares, issued and Outstanding 10,000 shares	$500,000
Common Stock, par value $1 per share; Authorized 600,000 shares, issued 200,000 Shares, and outstanding 190,000 shares	200,000
Total Capital Stock	700,000
Additional paid-in capital- In Excess of par-common From the sale of treasury stock	1,300,000 160,000
Total paid-in capital	2,160,000
Retained Earnings	301,000
Total paid-in capital and retained earnings	2,461,000
Less: Treasury stock,10,000 shares at cost	170,000
Total stockholders’ Equity	$2,291,000

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