Squires Inc. was organized on January 2, 2012, with authorized capital stock consisting of 40,000 shares of 10%, $200 par value preferred, and 300,000 shares of no-par, no stated value common. During the first two years of the company's existence, the following selected transactions took place:
2012
Jan. 2 Sold 15,000 shares of common stock at $14.
2 Sold 4,000 shares of preferred stock at $211.
Mar. 2 Sold common stock as follows: 11,300 shares at $19; 3,900 shares at $24.
July 10 Acquired a nearby piece of land, appraised at $500,000, for 800 shares of preferred stock and 34,000 shares of common. (Preferred stock was recorded at $211, the balance being assigned to common.)
Dec. 16 Declared the regular preferred dividend and a $1.75 common dividend.
28 Paid dividends declared on December 16.
31 Assume that revenues and expenses were closed to a temporary account, Income Summary. The income summary account showed a credit balance of $600,000, which was transferred to Retained Earnings.
2013
Feb. 27 Reacquired 11,000 shares of common stock at $18. The treasury stock is carried at cost. (State law requires that an appropriation of Retained Earnings be made for the purchase price of treasury stock. Appropriations are to be returned to Retained Earnings upon resale of the stock.)
June 17 Resold 8,000 shares of the treasury stock at $21.
July 31 Resold all of the remaining treasury stock at $16.
Sept. 30 Sold 17,000 additional shares of common stock at $22.
Dec. 16 Declared the regular preferred dividend and a $0.70 common dividend.
28 Dividends declared on December 16 were paid.
31 The income summary account showed a credit balance of $550,000, which was transferred to Retained Earnings.
Instructions:
1. Give the journal entries to record these transactions.
2. Prepare the Stockholders' Equity section of the balance sheet as of December 31, 2013.