Rabern Corp. completed the following transactions in 2016, the first year of operation: 1. Issued 15,000 shares

Question:

Rabern Corp. completed the following transactions in 2016, the first year of operation:

1. Issued 15,000 shares of $10 par common stock at par.

2. Issued 5,000 shares of $50 stated value preferred stock at $52 per share.

3. Purchased 800 shares of common stock as treasury stock for $12 per share.

4. Declared a 5 percent cash dividend on preferred stock.

5. Sold 300 shares of treasury stock for $16 per share.

6. Paid the cash dividend on preferred stock that was declared in Event 4.

7. Earned revenue of $80,000 and incurred operating expenses of $48,000.

8. Closed revenue, expense, and dividend accounts to the retained earnings account.

9. Appropriated $6,000 of retained earnings.

Required

a. Prepare journal entries to record these transactions and post them to T-accounts.

b. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2016.

Common Stock
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