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The ABD Corporation has the following information pertaining to stockholder’s eq

ID: 2392049 • Letter: T

Question

The ABD Corporation has the following information pertaining to stockholder’s equity as of December 31, 20X5:

Common Stock, $1 par, 300,000 sh. authorized, 180,000 shares

Issued and outstanding

$180,000

Paid-in Capital in Excess of Par – Common Stock

450,000     

Retained Earnings

1,500,000

REQUIRED:

1. Post the above balances in T accounts shown below.

2. Record the following 20X6 transactions.

3. Record the following first-year transactions in T accounts.

- Issued 40,000 shares of $1.00 par value common stock at a price of $4.00 per share.

- Issued 1,000 shares of 3% Preferred Stock, $100 par value for $105 per share.

- Purchased 12,000 of its own common shares at $3.00 per share.

- Declared and paid a cash dividend of $45,600.

1. Assuming Net Income for 20X6 was $300,000, prepare a stockholder’s equity section of the balance sheet as of December 31, 20X6. Be sure to include the number of Authorized, issued, and outstanding shares.

2. Company management declares a 10% stock dividend when the market price of the stock is $4.25 per share. Record the entry for this dividend. (show calculations)

Common Stock, $1 par, 300,000 sh. authorized, 180,000 shares

Issued and outstanding

$180,000

Paid-in Capital in Excess of Par – Common Stock

450,000     

Retained Earnings

1,500,000

Explanation / Answer

Solution 1:

Solution 2:

Solution 3:

Solution 4:

Solution 5:

Common Stock Particulars Debit Particulars Credit By beginning balance $180,000.00