Chapter 15 Stockholders' Equity PROBLEMS 4 P15-1 (Equity Transactions and Statement Preparation) On January 5, 2014, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipment with a fair July 29 Aug. 10 Dec. 31 Dec. 31 value of $50,000; a factory building with a fair value of $160,000; and land with an appraised valuedf $270,000 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.) Sold the 1800 treasury shares at $14 per share. Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Closed the Income Summary account. There was a $175,700 net income. Instructions (a) Record the journal entries for the transactions listed above. (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of Decemer 31, 2014