p15-1 (equity transactions and statement preparation) on january 5, 2010, phelps corporation received

Project Description:

p15-1 (equity transactions and statement preparation) on january 5, 2010, phelps corporation received
a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred
stock, and 50,000 shares of $10 par value common stock. it then completed these transactions.
jan. 11 issued 20,000 shares of common stock at $16 per share.
feb. 1 issued to sanchez corp. 4,000 shares of preferred stock for the following assets: machinery with a
fair market value of $50,000; a factory building with a fair market value of $160,000; and land with
an appraised value of $270,000.
july 29 purchased 1,800 shares of common stock at $17 per share. (use cost method.)
aug. 10 sold the 1,800 treasury shares at $14 per share.
dec. 31 declared a $0.25 per share cash dividend on the common stock and declared the preferred
dividend.
dec. 31 closed the income summary account. there was a $175,700 net income.
instructions
(a) record the journal entries for the transactions listed above.
(b) prepare the stockholders’ equity section of phelps corporation’s balance sheet as of december 31,
2010.
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Price Type: Negotiable

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