Nautical has two classes of stock authorized: $10 par preferred, and $1 par valu
ID: 2447416 • Letter: N
Question
Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2015, 125 shares of preferred stock and 3,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2015:
Declare a cash dividend on both common and preferred stock of $0.25 per share to all stockholders of record on June 15.
Nautical has the following beginning balances in its stockholders’ equity accounts on January 1, 2015: Preferred Stock, $1,250; Common Stock, $3,000; Paid-in Capital, $19,500; and Retained Earnings, $11,500. Net income for the year ended December 31, 2015, is $7,650.
March 1 Issue 3,000 additional shares of common stock for $10 per share. April 1 Issue 175 additional shares of preferred stock for $40 per share. June 1Declare a cash dividend on both common and preferred stock of $0.25 per share to all stockholders of record on June 15.
June 30 Pay the cash dividends declared on June 1. August 1 Repurchase 175 shares of common treasury stock for $7 per share. October 1 Reissue 125 shares of treasury stock purchased on August 1 for $9 per share.Explanation / Answer
Ans
Date Account Head Debit Credit 01-03-2015 Cash 30,000.00 Common Stock 3,000.00 Additional Paid in capital 27,000.00 01-04-2015 Cash 7,000.00 Preferred stock 1,750.00 Additional Paid in capital 5,250.00 01-06-2015 Common stock Dividend 1,500.00 Preference Dividend 75.00 Dividend Payable 1,575.00 30-06-2015 Dividend Payable 1,575.00 Cash 1,575.00 01-08-2015 Treasury Stock 1,225.00 Cash 1,225.00 01-10-2015 Cash 1,575.00 Treasury Stock 1,225.00 Additional Paid in capital 350.00Related Questions
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