The stockholders equity accounts of Miles Corporation on January 1, 2010, were as follows. Preferred Stock (10%,

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The stockholders’ equity accounts of Miles Corporation on January 1, 2010, were as follows.


Preferred Stock (10%, $100 par, noncumulative, 5,000 shares authorized) .$ 300,000

Common Stock ($5 stated value, 300,000 shares authorized) ....... 1,000,000

Paid-in Capital in Excess of Par Value—Preferred Stock ......... 20,000

Paid-in Capital in Excess of Stated Value—Common Stock ........ 425,000

Retained Earnings ....................... 488,000

Treasury Stock—Common (5,000 shares) ............... 40,000


During 2010, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1 Issued 3,000 shares of common stock for $25,500.

Mar. 20 Purchased 1,500 additional shares of common treasury stock at $8 per share.

June 14 Sold 4,000 shares of treasury stock—common for $36,000.

Sept. 3 Issued 2,000 shares of common stock for a patent valued at $19,000.

Dec. 31 Determined that net income for the year was $350,000.

Instructions

(a) Journalize the transactions and the closing entry for net income.

(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders’ equity accounts. (Use J1 as the posting reference.)

(c) Prepare a stockholders’ equity section at December 31, 2010.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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