Chapter PROBLEM 3 (15 points) on January 1, 2017, Beltran Corporation had the fo

Question

Chapter PROBLEM 3 (15 points) on January 1, 2017, Beltran Corporation had the following stockholders' equity accounts Preferred Stock (6%, $50 par value, 10,000 shares issued and outstanding) Paid-in Capital In Excess of Par-Preferred Stock Common Stock ($10 par value, 100,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $500,000 100,000 1,000,000 200,000 540,000 During the year, the following transactions occurred. Jan. 15 Feb. 15 Mar. 1 declared a $1 cash dividend per share to stockholders of record on Jan. 31, payable Feb. 15 Paid the dividend declared in January Issued 1,000 shares of Preferred stock for $63 cash per share Issued 10,000 Apr. 1 company's estimate of fair value of the land was $200,000. shares of common stock for land. The asking price of the land was $210,000. The Apr. 15 market price of the stock was $18 per share ared a 10% stock dividend to stockholders of record on April 30, distributable May 15 On April 15, the Decl May 1 May 15 Sep. 1 Dec. 31 Instructions: Journalize the transactions and the closing entry for net income Purchased 2,000 shares of its $10 par common stock at cash price of $20 per share. Issued the shares for the stock dividend Sold 1,000 shares of the treasury stock for cash at $21 per share Determined that net income for the year was $250,000.

Explanation / Answer

Date

Particulars

DR.

CR.

15-Jan

Retained earnings(100000 x $1)

$100,000.00

Dividends Payable

$100,000.00

15-Feb

Dividends Payable

$100,000.00

Cash

$100,000.00

1-Mar

Cash

$63,000.00

Preferred stock

$50,000.00

Paid-in Capital in excess of par-preferred stock

$13,000.00

1-Apr

land

$200,000.00

common stock

$100,000.00

paid-in capital in excess of par preferred stock

$100,000.00

15-Apr

retained earnings(110000 x 10% x $18)

$198,000.00

stock dividend payable/distributable

$198,000.00

1-May

treasury stock

$30,000.00

cash

$30,000.00

(cost method used)

15-May

Stock dividend payable/distrib.

$198,000.00

common stock

$110,000.00

paid in capital in excess of par-common stock

$88,000.00

1-Sep

cash(900 x $17)

$15,300.00

Treasury stock(900 x $15)

$13,500.00

paid in capital in excess of par-common stock

$1,800.00

1-Dec

Income Summary

net income

$250,000.00

(closing entry for NE)

$250,000.00

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Date

Particulars

DR.

CR.

15-Jan

Retained earnings(100000 x $1)

$100,000.00

Dividends Payable

$100,000.00

15-Feb

Dividends Payable

$100,000.00

Cash

$100,000.00

1-Mar

Cash

$63,000.00

Preferred stock

$50,000.00

Paid-in Capital in excess of par-preferred stock

$13,000.00

1-Apr

land

$200,000.00

common stock

$100,000.00

paid-in capital in excess of par preferred stock

$100,000.00

15-Apr

retained earnings(110000 x 10% x $18)

$198,000.00

stock dividend payable/distributable

$198,000.00

1-May

treasury stock

$30,000.00

cash

$30,000.00

(cost method used)

15-May

Stock dividend payable/distrib.

$198,000.00

common stock

$110,000.00

paid in capital in excess of par-common stock

$88,000.00

1-Sep

cash(900 x $17)

$15,300.00

Treasury stock(900 x $15)

$13,500.00

paid in capital in excess of par-common stock

$1,800.00

1-Dec

Income Summary

net income

$250,000.00

(closing entry for NE)

$250,000.00

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