8% preferred stock, $100 par Common stock, no par Additional paid-in capital on preferred stock $190,000 184,000 15,200 $389,200 Part a. A shareholder has raised the following questions: 1. What is the legal capital of the corporation? 2. At what average price per share has the preferred stock been issued? 3. How many shares of common stock have been issued (the common stock has been issued at an average price of $23 per share)? Part b. The company engaged in the following transactions in 2019: Mar. 2 Issued 350 shares of the 8% preferred stock at a price of $122 per share. Apr. 5 Sold 900 shares of common stock for $34 per share. Issued 400 shares of common stock in exchange for land. The stock is currently selling at $33 per share. June 1 Reacquired 500 shares of common stock at $36 per share. The company uses the cost method to account for 13 treasury stock. Oct. 19 Issued for $27,000 a combination of 500 shares of common stock and 100 shares of preferred stock. The common and preferred stock are currently selling for $35 and $125 per share, respectively. Nov. 16 Reissued the 500 shares of treasury stock at $38 per share. Dec. 31 Distributed an $8-per-share dividend on all preferred stock outstanding and a $2-per-share dividend on all common stock outstanding on this date (debit Retained Earnings and credit Cash for each dividend).
8% preferred stock, $100 par Common stock, no par Additional paid-in capital on preferred stock $190,000 184,000 15,200 $389,200 Part a. A shareholder has raised the following questions: 1. What is the legal capital of the corporation? 2. At what average price per share has the preferred stock been issued? 3. How many shares of common stock have been issued (the common stock has been issued at an average price of $23 per share)? Part b. The company engaged in the following transactions in 2019: Mar. 2 Issued 350 shares of the 8% preferred stock at a price of $122 per share. Apr. 5 Sold 900 shares of common stock for $34 per share. Issued 400 shares of common stock in exchange for land. The stock is currently selling at $33 per share. June 1 Reacquired 500 shares of common stock at $36 per share. The company uses the cost method to account for 13 treasury stock. Oct. 19 Issued for $27,000 a combination of 500 shares of common stock and 100 shares of preferred stock. The common and preferred stock are currently selling for $35 and $125 per share, respectively. Nov. 16 Reissued the 500 shares of treasury stock at $38 per share. Dec. 31 Distributed an $8-per-share dividend on all preferred stock outstanding and a $2-per-share dividend on all common stock outstanding on this date (debit Retained Earnings and credit Cash for each dividend).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Young Corporation has been operating successfully for several years. It is authorized to issue 24,000 shares of no-par common stock and 6,000 shares of 8%, $100 par preferred stock. The Contributed Capital section of its January 1, 2019, balance sheet is as follows: 1. Answer the questions in Part a. 2. Prepare
Transcribed Image Text:8% preferred stock, $100 par
Common stock, no par
Additional paid-in capital on preferred stock
$190,000
184,000
15,200
$389,200
Part a. A shareholder has raised the following questions:
1. What is the legal capital of the corporation?
2. At what average price per share has the preferred stock been issued?
3. How many shares of common stock have been issued (the common stock has been issued at an average price
of $23 per share)?
Part b. The company engaged in the following transactions in 2019:
Mar. 2 Issued 350 shares of the 8% preferred stock at a price of $122 per share.
Apr. 5 Sold 900 shares of common stock for $34 per share.
Issued 400 shares of common stock in exchange for land. The stock is currently selling at $33 per share.
June 1 Reacquired 500 shares of common stock at $36 per share. The company uses the cost method to account for
13
treasury stock.
Oct. 19 Issued for $27,000 a combination of 500 shares of common stock and 100 shares of preferred stock.
The common and preferred stock are currently selling for $35 and $125 per share, respectively.
Nov. 16 Reissued the 500 shares of treasury stock at $38 per share.
Dec. 31
Distributed an $8-per-share dividend on all preferred stock outstanding and a $2-per-share dividend on all
common stock outstanding on this date (debit Retained Earnings and credit Cash for each dividend).
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