eBook Show Me How Selected Stock Transactions oration sells and services pipe we
ID: 2537039 • Letter: E
Question
eBook Show Me How Selected Stock Transactions oration sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication Corporation at the beginning of the current fiscal year Preferred 296 stock, $80 par (100,000 shares authorized, 60,000 shares issued) Paid-In Capital in Excess of Par-Preferred Stock Common Stock, $9 par (3,000,000 shares authorized, 1,750,000 shares issued) Paid-In Capital in Excess of Par-Common Stock Retained Earnings $4,800,000 210,000 1,400,000 52,840,000 ring the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows a. Purchased 87,500 shares of treasury common for $8 per share. b. Sold 55,000 shares of treasury common for $11 per share. C. Issued 20,000 shares of preferred 2% stock at $84. d. Issued 400,000 shares of common stock at $13, receiving cash. e. Sold 18,000 shares of treasury common for $7.50 per share. f. Declared cash dividends of $1.60 per share on preferred stock and $0.05 per share on common stock g. Paid the cash dividends Required: Journalize the entries to record the transactions a. Purchased 87,500 shares of treasury common for $8 per shareExplanation / Answer
Answer:
Event
Description
Debit $
credit $
A
Treasury stock (87500*8)
700,000
cash
700,000
(to record the repurchase of stock)
Event
Description
Debit $
credit $
B
Cash (55000*11)
605000
Additional paid in capital -Treasury stock
(11-8)*55000
165000
Treasury stock
(55000 * 8)
440000
(to record the sales of treasury stock)
Event
Description
Debit $
credit $
C
cash (20000* 84)
1680000
Preferred stock (20000*80)
1600000
Additional paid in capital -Preferred stock
(20000*(84-80))
80000
(to record the issue of proffered stock)
Event
Description
Debit $
credit $
D
cash (400000*13)
5200000
Common stock (400000*9)
3600000
Additional paid in capital -Common stock
(400000*(13-9))
1600000
(to record the issue of common stock)
Event
Description
Debit $
credit $
E
cash (18000*7.5)
135000
Additional paid in capital -Treasury stock (18000*.5)
9000
Treasury stock (18000*8)
144000
(to record the issue of treasury stock)
Event
Description
Debit $
credit $
F
Retained dividend
234775
Preferred dividend payable (4800000+1600000)*.02
128000
common stock dividend payable
(2135500*.05)
106775
(To record the declaration of cash dividend on preferred stock and common stock)
Event
Description
Debit $
credit $
G
Preferred dividend payable
128000
common stock dividend payable
106775
cash
234775
(to record the payment of dividend)
Event
Description
Debit $
credit $
A
Treasury stock (87500*8)
700,000
cash
700,000
(to record the repurchase of stock)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.