Windsor Company reported the following amounts in the stockholders\' equity sect

Question

Windsor Company reported the following amounts in the stockholders' equity section of its December 31, 2016, balance sheet. Preferred stock, 9%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000 Common stock, $5 par (102,000 shares authorized, 20,400 shares issued) 102,000 Additional paid-in capital 120,000 Retained earnings 495,000 Total $917,000 During 2017, Windsor took part in the following transactions concerning stockholders' equity. 1. Paid the annual 2016 $9 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,700 shares of its own outstanding common stock for $41 per share. Windsor uses the cost method. 3. Reissued 600 treasury shares for land valued at $30,400. 4. Issued 480 shares of preferred stock at $105 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $44 per share. 6. Issued the stock dividend. 7. Declared the annual 2017 $9 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable In 2018.

Explanation / Answer

1 Dividends payable-Preferred stock 18000 Dividends payable-Common stock 40800 Cash 58800 2 Treasury stock (1700*41) 69700 Cash 69700 3 Land 30400 Treasury stock (600*41) 24600 Paid in capital from treasury stock 5800 4 Cash (480*105) 50400 Preferred stock (480*100) 48000 Paid in capital in excess of par-Prefered stock 2400 5 Retained earnings (1930*44) 84920 Common stock dividend distributable (1930*5) 9650 Paid in capital in excess of par-Common stock (1930*39) 75270 6 Common stock dividend distributable 9650 Common stock 9650 7 Retained earnings 64780 Dividends payable-Preferred stock (2480*9) 22320 Dividends payable-Common stock (21230*2) 42460

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