Exercise 13-11 The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Eudaley Corporation at December 31, 2017. Common Stock ($5 stated value) $1,725,000 Paid-in Capital in Excess of Par—Preferred Stock 280,000 Paid-in Capital in Excess of Stated Value—Common Stock 907,000 Preferred Stock (8%, $105 par) 509,250 Retained Earnings 1,180,000 Treasury Stock (10,000 common shares) 120,000 Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.

Stockholders’ equity

Common Stock ($5 stated value)                             $1,725,000

Preferred Stock (8%, $105 par)                                 $509,250

Paid-in Capital in Excess of Par - Preferred Stock  $280,000

Paid-in Capital in Excess of Par - Common Stock   $907,000

Retained Earnings                                                     $1,180,000

Treasury Stock (10,000 common shares)                ($120,000)

Total Stockholders’ equity                                        $4,481,250

Explanation:

Preferred and Common stock are recorded on basis of their par value and Excess to par value separately.

Retained earning is the balance of accumulated earnings after apaying dividends

Treasury stock balance includes the value of own share repurchased by the company. It is a contra equity account and has debit nature.

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

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