The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were

Question

The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were as follows.

During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Determined that net income for the year was $276,600. Paid the dividend declared on December 1.

Journalize the transcations

Preferred Stock (7%, $100 par noncumulative, 4,150 shares authorized) $249,000 Common Stock ($5 stated value, 345,000 shares authorized) 1,437,499 Paid-in Capital in Excess of Par Value—Preferred Stock 12,450 Paid-in Capital in Excess of Stated Value—Common Stock 552,000 Retained Earnings 694,000 Treasury Stock (4,150 common shares) 33,200

Explanation / Answer

Journal Entries Date Account titles & Explanations Debit Credit 1-Feb cash 27,240 common stock (4540*5) 22700 paid in capital in excess of stated value- CS 4,540 20-Mar Treasury stock 10150 cash (1,450*7) 10,150 1-Oct Cash 17430 Dividends payable-PS (100*7%*2490 shares) 17,430 1-Nov dividends payable-ps 17,430 cash 17,430 1-Dec cash dividend 188,878 dividends payable-CS 188,878 (287499.80+4540-8-1450) 290,582 shares*.65) 31-Dec income summary 276,600 retained earnings 276,600 dividends payable-CS 188,878 cash 188,878

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