In January 2011, Delgado Corporation was organized and authorized to issue 2,000,000 shares of no-par common stock and 50,000 shares of 5 percent, $50 par value, noncumulative preferred stock. The stock-related transactions for the first year’s operations were as follows:

REQUIRED

1. For each of the preceding transactions, enter in the blanks provided the account numbers and dollar amounts (as shown in the example) for the account(s) debited and credited. The account numbers are as follows: 110, Cash; 120, Land; 121, Building; 220, Dividends Payable; 305, Preferred Stock; 310, Common Stock; 312, Additional Paid-In Capital; 313, Paid-In Capital, Treasury Stock; 340, Retained Earnings; 341, Dividends; 350, Treasury Stock, Common; 510, Start-up and Organization Costs.

2. Why is the stockholders’ equity section of the balance sheet an important consideration in analyzing the performance of a company?

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Account Debited Credited Account Dollar Account Dollar Number Amount | Number Amount Jan. 19 Sold 15,000 shares of common stock for S31,500 State law requires a minimum of SI stated value per share. Issued 5,000 shares of common stock to attor neys and accountants for services valued at $11,000 and provided during the organization of the corporation 310 S15,000 110S31,500 312S16,500 Jan. 21 Feb. 7Issued 30,000 shares of common stock for a build ing that had an appraised valuc of $78,000 Purchased 10,000 shares of its common stock at S3 per share Issued 5,000 shares of common stock to employ- ees under a stock option plan that allows any employce to buy shares at the current market price, which is now $3 per share. Sold 2,500 shares of treasury stock for $4 per Mar. 22 July 15 Aug. 1 Sept. 1 Declared a cash dividend of S0.15 per common share to be paid on September 25 to stockholders of record on September 15 Date of record for cash dividends Paid cash dividends to stockholders of record on September 15 Issued 4,000 shares of common stock for a piecc of land. The stock was sell ing for S3 per share, and the land had a fair market value of $12,000 Issued 2,200 shares of preferred stock for S50 per 15 25 Oct. 30 0 Dec. 15