Richard Corporation was founded on January 1, 2012, and entered into the following stock transactions during 2012:

Question:

a. Received authorization for 100,000 shares of $20 par-value common stock, 50,000 shares of 6% preferred stock with a par value of $5, and 50,000 shares of no-par common stock.

b. Issued 25,000 shares of the $20 par-value common stock at $24 per share.

c. Issued 10,000 shares of the preferred stock at $8 per share.

d. Issued 5,000 shares of the no-par common stock at $22 per share.

e. Reacquired 1,000 shares of the $20 par-value common stock at $25 per share.

f. Reacquired 500 shares of the no-par common stock at $20 per share.

g. Reissued 250 of the 1,000 reacquired shares of $20 par-value common stock at $23 per share.

h. Reissued all the 500 reacquired shares of no-par common stock at $23 per share.

i. Closed the $14,000 net income to Retained Earnings. Revenues and expenses for the year were $90,000 and $76,000, respectively.

Required:

1. Prepare journal entries to record the 2012 transactions in Richard Corporation’s books.

2. Prepare the stockholders’ equity section of Richard Corporation’s balance sheet at December 31, 2012. Assume that the transactions represent all the events involving equity accounts during 2012.

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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... 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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...