The following is the stockholders’ equity of Piesco Corporation on October 1, 201X:

Paid-In Capital
Preferred 17% Stock, $11 par value, authorized 6,300 shares, shares, 3,300 shares issued and outstanding		$36,300
Common Stock, $8 par value, authorized 24,000 shares, 10,000 shares issued and outstanding		80,000
Additional Paid-In Capital
Paid-In Capital in Excess of Par Value – Preferred	$10,000
Paid-In Capital in Excess of Par Value – Common	7,000
Paid-In Capital in Excess of Par Value – Stock Dividend	2,500
Total Additional Paid-In Capital		19,500
Total Paid-In Capital		$135,800
Retained Earnings		180,000
Total Stockholders’ Equity			$315,800

Figure 5

Tasks:

1. Journalize the transactions in general journal form.
2. Prepare the stockholders’ equity section of the balance sheet using the legal capital approach as of December 31, 201X.

The working papers that accompany this text have accounts to update ledger balances. Be sure to put in the beginning balances. Use the Blueprint as a guide to the setup of stockholders’ equity.

• Oct. 3 Declared a $0.50 per shared dividend on the common stock and a $1.20 per share dividend on the preferred. (The Dividends Payable account will record amounts for both common and preferred, although companies could set up Common Dividend Payable and Preferred Dividend Payable accounts.)
• Nov. 15 Dividends were paid that were declared on October 3.
• Nov. 18 Purchased 340 shares of its own common stock at $14 per share.
• Nov. 25 Reissued 90 shares at $17 per shared.
• Nov. 26 Declared a 15% stock dividend on common. Market value of stock is $48 per share.
• Dec. 29 Distributed stock dividend declared on November 26.
• Dec. 30 Reissued 80 shares of treasury stock at $12 per share.
• Dec. 31 Closed the Income Summary account, which had net income of $89,000, to Retained Earni

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Answer Date Journal Debit amount Credit Amount 3Oct Retained Earnings Common Stock Dividend 500000 R... View the full answer