Choctaw Co. completed the following transactions in 2018, the first year of oper
ID: 2390594 • Letter: C
Question
Choctaw Co. completed the following transactions in 2018, the first year of operation 1. Issued 28,000 shares of $10 par common stock for $10 per share. 2. Issued 3,800 shares of $20 stated value preferred stock for $20 per share 3. Purchased 1,800 shares of common stock as treasury stock for $12 per share. 4. Declared a $2,800 cash dividend on preferred stock. 5. Sold 800 shares of treasury stock for $14 per share 6. Paid $2,800 cash for the preferred dividend declared in Event 4. 7. Earned cash revenues of $94,000 and incurred cash expenses of $49,000. 8. Appropriated $8,800 of retained earnings. Required a. Organize the transaction in accounts under an accounting equation. b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018.Explanation / Answer
Event
Assets
=
liabilities
cash
=
dividend payable
+
preferred stock
+
common stock
+
+ paid in capital in excess- treasury stock
-
Treasury stock
+
retained earnings
+
appropriated retained earning
Accounting title retained earning
1-
280000
=
0
+
0
+
280000
+
0
-
0
+
0
+
0
NA
2-
76000
=
0
+
76000
+
0
+
0
-
0
+
0
+
0
NA
3-
-21600
=
0
+
0
+
0
+
0
-
-21600
+
0
+
0
NA
4-
=
2800
+
0
+
0
+
0
-
0
+
-2800
+
0
-
5-
11200
=
0
+
0
+
0
+
1600
-
9600
+
0
+
0
NA
6-
-2800
=
-2800
+
0
+
0
+
0
-
0
+
0
+
0
NA
7-
45000
=
0
+
0
+
0
+
0
-
0
+
45000
+
0
+
8-
0
=
0
+
0
+
0
+
0
-
0
+
-8800
+
8800
-
total
387800
=
0
+
76000
+
280000
+
1600
-
-12000
+
33400
+
8800
statement of stockholders Equity
common stock
280000
preferred stock
76000
additional paid in capital in excess -treasury stock
1600
less treasury stock
-12000
total paid in capital
345600
retained earning
unappropriated
33400
appropriated
8800
total retained earning
42200
total stockholders equity
387800
Event
Assets
=
liabilities
cash
=
dividend payable
+
preferred stock
+
common stock
+
+ paid in capital in excess- treasury stock
-
Treasury stock
+
retained earnings
+
appropriated retained earning
Accounting title retained earning
1-
280000
=
0
+
0
+
280000
+
0
-
0
+
0
+
0
NA
2-
76000
=
0
+
76000
+
0
+
0
-
0
+
0
+
0
NA
3-
-21600
=
0
+
0
+
0
+
0
-
-21600
+
0
+
0
NA
4-
=
2800
+
0
+
0
+
0
-
0
+
-2800
+
0
-
5-
11200
=
0
+
0
+
0
+
1600
-
9600
+
0
+
0
NA
6-
-2800
=
-2800
+
0
+
0
+
0
-
0
+
0
+
0
NA
7-
45000
=
0
+
0
+
0
+
0
-
0
+
45000
+
0
+
8-
0
=
0
+
0
+
0
+
0
-
0
+
-8800
+
8800
-
total
387800
=
0
+
76000
+
280000
+
1600
-
-12000
+
33400
+
8800
statement of stockholders Equity
common stock
280000
preferred stock
76000
additional paid in capital in excess -treasury stock
1600
less treasury stock
-12000
total paid in capital
345600
retained earning
unappropriated
33400
appropriated
8800
total retained earning
42200
total stockholders equity
387800
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