Selected Stock Transactions The following selected accounts appear in the ledger

Question

Selected Stock Transactions The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year: Preferred 2% Stock, $175 par (90,000 shares authorized, 45,000 shares issued) $7,875,000 Paid-In Capital in Excess of Par—Preferred Stock 1,260,000 Common Stock, $25 par (800,000 shares authorized, 310,000 shares issued) 7,750,000 Paid-In Capital in Excess of Par—Common Stock 1,010,000 Retained Earnings 37,937,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: Issued 80,000 shares of common stock at $30, receiving cash. Issued 23,000 shares of preferred 2% stock at $191. Purchased 48,000 shares of treasury common for $28 per share. Sold 24,000 shares of treasury common for $31 per share. Sold 16,000 shares of treasury common for $26 per share. Declared cash dividends of $3.50 per share on preferred stock and $0.08 per share on common stock. Paid the cash dividends. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Required: a. Issued 80,000 shares of common stock at $30, receiving cash. b. Issued 23,000 shares of preferred 2% stock at $191. c. Purchased 48,000 shares of treasury common for $28 per share. d. Sold 24,000 shares of treasury common for $31 per share. e. Sold 16,000 shares of treasury common for $26 per share. f. Declared cash dividends of $3.50 per share on preferred stock and $0.08 per share on common stock. g. Paid the cash dividends. Next

Explanation / Answer

a Cash 2400000 =80000*30       Common Stock 2000000 =80000*25       Paid-In Capital in Excess of Par-Common Stock 400000 b Cash 4393000 =23000*191      Preferred Stock 4025000 =23000*175       Paid-In Capital in Excess of Par-Preferred Stock 368000 c Treasury Stock 1344000 =48000*28         Cash 1344000 d Cash 744000 =24000*31        Treasury Stock 672000 =24000*28        Paid-In Capital from Sale of Treasury Stock 72000 e Cash 416000 =16000*26 Paid-In Capital from Sale of Treasury Stock 32000        Treasury Stock 448000 =16000*28 f Cash Dividends 268560 =(45000+23000)*3.5+(310000+80000-48000+24000+16000)*0.08         Cash Dividends Payable 268560 g Cash Dividends Payable 268560         Cash 268560

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