chAp 13-03 instruction The following selected accounts appear in the ledger of P
ID: 2522415 • Letter: C
Question
chAp 13-03
instruction
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:
During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
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JOURNAL
ACCOUNTING EQUATION
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Preferred 1% Stock, $50 par (100,000 shares authorized, 83,900 shares issued) $4,195,000 Paid-In Capital in Excess of Par—Preferred Stock 184,580 Common Stock, $3 par (5,000,000 shares authorized, 2,120,000 shares issued) 6,360,000 Paid-In Capital in Excess of Par—Common Stock 1,590,000 Retained Earnings 31,692,000Explanation / Answer
Journal Entries (Amounts in $)
Working Note:-
1) Total Preferred stock shares outstanding on Dec 6 = Beg. Bal+Issued on Feb. 10
= 83,900 shares+10,700 shares = 94,600 shares
Preferred Dividend = 94,600 shares*$0.50 per share = $47,300
Total Common stock outstanding on Dec 6 = Beg. Bal.+Issued on Jan 5-Treasury stock bal
= 2,120,000+467,700-(53,000-20,000-5,200)
= 2,120,000+467,700-27,800 = 2,559,900 shares
Common Stock Dividends = 2,559,900 shares*$0.10 per share = $255,990
Total cash dividends payable = Preferred Dividends+Common Stock Dividends
= $47,300+$255,990 = $303,290
Date Description Post Ref. Debit Credit 1 Jan 5 Cash (467,700*$9) 4,209,300 2 Common Stock (467,700*$3 par) 1,403,100 3 Paid-In Capital in Excess of Par-Common Stock [467,700*($9-$3)] 2,806,200 4 Feb. 10 Cash (10,700*$62 per share) 663,400 5 Preferred Stock (10,700*$50 par) 535,000 6 Paid-In Capital in Excess of Par-Preferred Stock [10,700*($62-$50)] 128,400 7 Mar 19 Treasury Stock (53,000*$6 per share) 318,000 8 Cash 318,000 9 May 16 Cash (20,000 shares*$8) 160,000 10 Treasury Stock (20,000*$6 per share) 120,000 11 Paid-In Capital from Sale of Treasury Stock (20,000*$2) 40,000 12 Aug. 25 Cash (5,200*$5) 26,000 13 Paid-In Capital from Sale of Treasury Stock (5,200*$1) 5,200 14 Treasury Stock (5,200*$6) 31,200 15 Dec 6 Cash Dividends (Working Note 1) 303,290 16 Cash Dividends Payable 303,290 17 Dec 31 Cash Dividends Payable 303,290 18 Cash 303,290Related Questions
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