at the end of 2013, haley corp. had the following equipty accounts and balances
ID: 2490116 • Letter: A
Question
at the end of 2013, haley corp. had the following equipty accounts and balances
common stock, $10 par $800,000
Additional paid in capital-common stock $200,000
retained earnings $279,000
During 2014, Haley engaged in the following transactions involving its equity accounts:
a.Sold 5,000 shares of common stock for $19 per share.
b.Sold 1,200 shares of 12%, $50 par preferred stock at $75 per share.
c.Declared and paid cash dividends of $22,000.
d.Repurchased 1,000 shares of treasury stock (common) for $24 per share.
e.Sold 300 of the treasury shares for $26 per share.
Required:
1. Prepare the journal entries for Transactions a through e. For a compound transaction
2. Assume that 2014 net income was $123,700. Prepare a statement of stockholders' equity at December 31, 2014.
Explanation / Answer
1. Journal Entries
a) Bank A/c (5000*19) -Dr 95,000
To Common Stock (5000*10) 50,000
To Share Premuim (5000*9) 45,000
b) Bank A/c (1200*75) -Dr 90,000
To 12% Prefered Stock (1200*50) 60,000
To Share Premuim ( 1200*25) 30,000
c) Profit & Loss A/c - Dr 22,000
To Dividend 22,000
Dividend - Dr 22,000
To Cash 22,000
d) Common Stock (1000*10) - Dr 10,000
Security Premuim A/c (1000*14) - Dr 14,000
To Bank(1000*24) 24,000
e) Bank A/c (300*26) - Dr 7,800
To Common Stock (300*10) 3,000
To Share Premuim (300*16) 4,800
Compounded Journal Entry
Bank A/c - Dr 1,68,800
Profit & Loss A/c - Dr 22,000
To Common Stock 43,000
To Share Premuim 65,800
To 12% Prefered Stock 60,000
To Cash 22,000
2.
Stat of Stockholder's Equity as on 31.12.14 Date Particular Amount Date Particular Amount 31.12.14 To Dividend 22,000 1.1.14 By Bal b/d(Retained Earnings) 2,79,000 31.12.14 By Profit & Loss A/c 1,23,700 31.12.14 To Bal C/d(Balancing Figure) 3,80,700Related Questions
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