On January 5, 2017, Grouper Corporation received a charter granting the right to

Question

On January 5, 2017, Grouper Corporation received a charter granting the right to issue 5,200 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 51,700 shares of $10 par value common stock. It then completed these transactions.

Closed the Income Summary account. There was a $163,800 net income.

Record the journal entries for the transactions listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record entries in the order displayed in the problem statement. Round answers to 0 decimal places, e.g. $5,275.)

Date

Account Titles and Explanation

Debit

Credit

Feb. 1

Aug. 10

Prepare the stockholders’ equity section of Grouper Corporation’s balance sheet as of December 31, 2017. (Enter account name only and do not provide descriptive information.)

Jan. 11 Issued 19,800 shares of common stock at $15 per share. Feb. 1 Issued to Sanchez Corp. 3,900 shares of preferred stock for the following assets: equipment with a fair value of $49,200; a factory building with a fair value of $160,000; and land with an appraised value of $297,000. July 29 Purchased 1,800 shares of common stock at $19 per share. (Use cost method.) Aug. 10 Sold the 1,800 treasury shares at $15 per share. Dec. 31 Declared a $0.50 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31

Closed the Income Summary account. There was a $163,800 net income.

Explanation / Answer

Part 1

Part 2

Grouper corporation

Stockholders' equity

December 31 2017

Date account titles and explanation debit credit Jan.11 cash (19800*15) 297000 Common Stock (19800*10) 198000 Paid in capital in excess of par - common (19800*5) 99000 Feb. 1 equipment 49200 Buildings 160000 Land 297000 Preferred stock (3900*100) 390000 Paid in capital in excess of par - preferred (balancing figure) 116200 July 29 treasury stock (1800*19) 34200 Cash 34200 Aug. 10 Cash (1800*15) 27000 Retained earnings (1800*4) 7200 Treasury stock (1800*19) 34200 Dec. 31 Retained earnings 41100 Dividend payable (3900*100*8%)+(19800*0.50) 41100 Dec. 31 income summary 163800 Retained earnings 163800

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