The Stockholders' Equity section of Dallas Corporation's balance sheet on January 1, 2016, follows, along with selected
Question:
The Stockholders' Equity section of Dallas Corporation's balance sheet on January 1, 2016, follows, along with selected transactions for the year:
Stockholders' Equity
Preferred Stock (6%, $50 par value,
10,000 shares authorized)
Issued and Outstanding, 1,000 Shares........................................ $50,000
Paid-in Capital in Excess of Par Value........................................... 3,500............... $ 53,500
Common Stock (no-par value, $20 stated value,
20,000 shares authorized)
Issued and Outstanding, 4,000 Shares........................................ $80,000
Paid-in Capital in Excess of Stated Value .......................................3,000................... 83,000
Retained Earnings.............................................................................................. 165,500
Total Stockholders' Equity ..................................................................................$ 302,000
INSTRUCTIONS
1. Set up general ledger accounts for the stockholders' equity items and enter the given balances. In addition to the accounts listed, open the accounts Donated Capital, Treasury Stock- Preferred, and Retained Earnings Appropriated for Treasury Stock.
2. Record the transactions listed below in general journal form.
3. Post general journal entries only to the stockholders' equity accounts.
4. Prepare the Stockholders' Equity section of the balance sheet as of December 31, 2016.
DATE TRANSACTIONS
Feb. 1 Reacquired 100 shares of preferred stock at $52 per share, and set up an appropriation of retained earnings equal to cost of treasury stock purchased, as required by law.
Mar. 1 Declared a 2-for-1 split of common stock and reduced the stated value to $10.00 per share. Date of record is March 20. Date of issue is April 1.
Apr. 1 Issued new shares of common stock called for by split.
June 20 Declared a cash dividend of 3 percent on preferred stock outstanding, payable July 10 to holders of record on July 1.
July 10 Paid cash dividends on preferred stock.
Nov. 10 Purchased 200 shares of the corporation's own preferred stock to be held as treasury stock, paying $53 per share. Appropriated retained earnings equal to cost of the shares.
Dec. 17 Declared the semiannual cash dividends of 3 percent on preferred stock and a $1 per share on common stock. Both are payable to stockholders of record on December 28 and are payable on
January 8. Make separate entries.
24 Received land valued at $100,000 as a gift from a neighboring city agreeing to build a new factory.
31 The Income Summary account had a credit balance of $50,000 after income tax. Give the entry to close the account.
Analyze: As of December 31, what percent of total authorized preferred stock is held in treasury?
Common StockCommon 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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
GENERAL JOURNAL PAGE 1 DATE DESCRIPTION POST REF DEBIT CREDIT 2016 Feb 1 Treasury Stock x Preferred 372 5 2 0 0 00 Cash 5 2 0 0 00 Repurchased 100 shares of preferred at 52 per share 1 Retained Earnin...View the full answer
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
