1. ChwelveCo was incorporated on January 1 of Year 1. Below are a number of equity-related transactions made by ChwelveCo in Year 1. January 13: February 11: February 27: June 18: July 7: July 8: August 17: Authorized 400,000 shares of common stock with a par value of $1 and 10,000 shares of 3% preferred stock with a par value of $100. Issued 200,000 shares of common stock at a price of $14/share Issued 5,000 shares of preferred stock at a price of $200/share Repurchased 10,000 shares of common stock for $8/share Declared a cash dividend on all outstanding shares of preferred stock Declared a $15/share cash dividend on all outstanding shares of common stock Resold the 10,000 shares that had previously been repurchased on June 18. The total cash received from this sale of stock was $100,000. September 25: Paid the cash dividend to preferred stockholders January 1 of Year 2: Paid the cash dividend to common stockholders ● Other information: ChwelveCo's Net Income for Year 1 was $5,000,000. a. Record the appropriate journal entry for each of the transactions given above b. Prepare the Owners' Equity portion of Chwelve Co's balance sheet as of December 31 Year1. c. What is the total number of common shares outstanding on December 31 of Year 1?
1. ChwelveCo was incorporated on January 1 of Year 1. Below are a number of equity-related transactions made by ChwelveCo in Year 1. January 13: February 11: February 27: June 18: July 7: July 8: August 17: Authorized 400,000 shares of common stock with a par value of $1 and 10,000 shares of 3% preferred stock with a par value of $100. Issued 200,000 shares of common stock at a price of $14/share Issued 5,000 shares of preferred stock at a price of $200/share Repurchased 10,000 shares of common stock for $8/share Declared a cash dividend on all outstanding shares of preferred stock Declared a $15/share cash dividend on all outstanding shares of common stock Resold the 10,000 shares that had previously been repurchased on June 18. The total cash received from this sale of stock was $100,000. September 25: Paid the cash dividend to preferred stockholders January 1 of Year 2: Paid the cash dividend to common stockholders ● Other information: ChwelveCo's Net Income for Year 1 was $5,000,000. a. Record the appropriate journal entry for each of the transactions given above b. Prepare the Owners' Equity portion of Chwelve Co's balance sheet as of December 31 Year1. c. What is the total number of common shares outstanding on December 31 of Year 1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. ChwelveCo was incorporated on January 1 of Year 1. Below are a number of equity-related
transactions made by ChwelveCo in Year 1.
January 13:
February 11:
February 27:
June 18:
July 7:
July 8:
August 17:
Authorized 400,000 shares of common stock with a par value of $1 and 10,000
shares of 3% preferred stock with a par value of $100.
Issued 200,000 shares of common stock at a price of $14/share
Issued 5,000 shares of preferred stock at a price of $200/share
Repurchased 10,000 shares of common stock for $8/share
Declared a cash dividend on all outstanding shares of preferred stock
Declared a $15/share cash dividend on all outstanding shares of common stock
Resold the 10,000 shares that had previously been repurchased on June 18. The
total cash received from this sale of stock was $100,000.
September 25: Paid the cash dividend to preferred stockholders
January 1
of Year 2:
Paid the cash dividend to common stockholders
Other information:
Chwelve Co's Net Income for Year 1 was $5,000,000.
a. Record the appropriate journal entry for each of the transactions given above
b. Prepare the Owners' Equity portion of Chwelve Co's balance sheet as of December 31 Year1.
c. What is the total number of common shares outstanding on December 31 of Year 1?
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