1. The ledger of Zeta Corporation at December 31, 2012, after the books have been closed, contains the following stockholders' equity accounts.

Preferred Stock (12,300 shares issued) $1,254,600
Common Stock (333,000 shares issued) 2,331,000
Paid-in Capital in Excess of Par Value-Preferred Stock 221,500
Paid-in Capital in Excess of Stated Value-Common Stock 1,604,800
Retained Earnings 2,831,810

A review of the accounting records reveals this information:

1. Preferred stock is 8%, $102 par value, noncumulative. Since January 1, 2011, 12,300 shares have been outstanding; 24,600 shares are authorized.

2. Common stock is no-par with a stated value of $7 per share; 666,000 shares are authorized

3. The January 1, 2012, balance in Retained Earnings was $2,378,510.

4. On October 1, 60,800 shares of common stock were sold for cash at $9 per share.

5. A cash dividend of $409,100 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2011.

6. Net income for the year was $862,400.

7. On December 31, 2012, the directors authorized disclosure of a $154,000 restriction of retained earnings for plant expansion.

2. On January 1, 2012, Neville Inc. had these stockholders' equity balances.

Common Stock, $1 par (2,283,500 shares authorized, 703,400 shares issued and outstanding) $703,400

Paid-in Capital in Excess of Par Value 1,418,700

Retained Earnings 695,400

During 2012, the following transactions and events occurred.
1. Issued 46,900 shares of $1 par value common stock for $3 per share.
2. Issued 59,500 shares of common stock for cash at $6 per share.
3. Purchased 15,200 shares of common stock for the treasury at $3.60 per share.
4. Declared and paid a cash dividend of $154,100.
5. Earned net income of $398,500.

Prepare the stockholders' equity section of the balance sheet at December 31, 2012.

Brief Exercise 11-11

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Burden Inc. is considering these two alternatives to finance its construction of a new $1050000 plant:

(a) Issuance of 105000 shares of common stock at the market price of $10 per share.

(b) Issuance of $1050000, 8% bonds at face value.