Prepare in Proper Form the Stockholders' Equity Section of the Balance

question 52

Essay

Prepare in proper form the stockholders' equity section of the balance sheet from the following selected accounts and balances taken from the adjusted trial balance of Pathway Corporation on June 30,20xx.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Partial Adjusted Trial Balance }$
$\begin{array}{|l|l|l|}\hline\text { Account } & \text { Debit } & \text {Credit}\\\hline \text { Common Stock- } \$ 10 \text { stated value, } 50,000 \text { shares authorized, } & \\45,000 \text { shares outstanding } &&450,000 \\\text { Preferred Stock- } \$ 100 \text { par value, } 8 \text { percent cumulative convertible, } & \\\text { 3,000 shares authorized and outstanding } &&300,000 \\\text { Additional Paid-in Capital, Preferred } &&15,000 \\\text { Additional Paid-in Capital, Common } &&75,000 \\\text { Retained Earnings } &&30,000\\\hline\end{array}$

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Definitions:

Profit Maximized

The point at which a firm achieves the highest possible profit margin, where marginal revenue equals marginal cost.

Total Cost

The overall expenditure incurred by a company in the production of goods or services, including fixed and variable costs.

Total Revenue

The total income generated from the sale of goods or services by a company.

Profitable One

An entity or venture that generates income exceeding its costs and expenses, thereby yielding a surplus or profit.