(I believe that I am struggling with getting started becuase my journal enteries
ID: 2578265 • Letter: #
Question
(I believe that I am struggling with getting started becuase my journal enteries are wrong)
Use the following information to answer these questions:
the stockholder's equity accounts of a corporation on January 1, 2017, were as follows:
preferred stock (6%, $200 par, cumulative, 4,000 shares authorized) $470,000
common stock ($5 par, 1,000,000 shares authorized) 1,350,000
additional paid in capital - preferred 89,300
additional paid in capital - common 6,480,000
retained earnings 1,657,000
treasury stock - common (7,000 shares) 126,000
During 2017, the corporation had the following transactions and events relating to its stockholders equity.
Jan 2 Issued 30,000 shares of common stock in excahnge for property. On this date the stock was trading for $15 per share.
Feb 21 Issued 400 shares of preferred stock at $250 per share
mar 21 sold 1,000 shares of treasury stock - common for $21 per share
nov 14 purchased 2,000 shares of common stock for the treasury at a cost of $22,000
dec 31 Determined that net income for the year was $318,000. Dividends were declared and paid during December. These dividends included $0.25 per share dividend to common stockholders of record as of December 20. There are no dividends in arrears.
1) as of dec. 31, 2017, what is the average selling price of the preferred stock? (I got $225, but it is incorrect)
2) how many shares of common stock are outstanding as of Dec 31, 2017?
3) what is the total contributed capital as of dec 31, 2017?
4) what is the balance in retained earnings as of december 31, 2017?
5) what is total stockholder's equity as of december 31, 2017?
Explanation / Answer
Date Accounts Title Dr Cr 2-Jan Property Asset 450000 common stock (30000*5) 150000 Additional Paid in capital-Common 300000 21-Feb Cash 100000 Preferred Stock 80000 Additional Paid in capital-Preferred 20000 21-Mar Cash 21000 Addotional paid in capital-Treasury 3000 Treasury Stock 18000 14-Nov Treasury Stock 22000 Cash 22000 31-Dec Income summary 318000 Retained Eranings 318000 Cash Dividend 106000 Retained Eranings 106000 Preferred stock (470000+80000)*6% 33000 Common (270000-7000+30000+1000-2000)*.25 73000 ans 1 Avg selling price 239.75 (470000+89300+100000)/(2350+400) 240 rounded off ans 2 Common stock outstanding 292000 (270000-7000+30000+1000-2000) ans 3 Total contributed capital preferred stock (6%, $200 par, cumulative, 4,000 shares authorized) 550000 470000+80000 common stock ($5 par, 1,000,000 shares authorized) 1380000 1350000+30000 additional paid in capital - preferred 109300 89300+20000 additional paid in capital - common 6780000 6480000+300000 Addotional paid in capital-Treasury 3000 Total contributed capital 8822300 ans 4 Retained Eranings 4731000 (1657000+3180000-106000) retained earnings 1,657,000 treasury stock - common (7,000 shares) 126,000 ans 5 preferred stock (6%, $200 par, cumulative, 4,000 shares authorized) 550000 common stock ($5 par, 1,000,000 shares authorized) 1380000 additional paid in capital - preferred 109300 additional paid in capital - common 6780000 Addotional paid in capital-Treasury 3000 Total contributed capital 8822300 Retained earnings 4731000 Less: treasury stock (6000+2000) shares -130000 126000-18000+22000 Total stockholder Equity 13423300
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