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appear in the ledger of Parks Construction Inc. at the beginning of the current year: Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued) $3,755,000 Paid-In Capital in Excess of Par-Preferred Stock 165,220 Common Stock, $3 par (5,000,000 shares authorized, 1,690,000 shares issued) 5,070,000 Paid-In Capital in Excess of Par-Common Stock 1,014,000 Retained Earnings 30,836,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Issued 454,700 shares of common stock at $8, receiving cash. b. Issued 11,800 shares of preferred 1% stock at $61. C. Purchased 46,500 shares of treasury common for S8 per share. d. Sold 20,700 shares of treasury common for $10 per share. e. Sold 5,700 shares of treasury common for $7 per share. f. Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock. Paid the cash dividends

appear in the ledger of Parks Construction Inc. at the beginning of the current year: Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued) $3,755,000 Paid-In Capital in Excess of Par-Preferred Stock 165,220 Common Stock, $3 par (5,000,000 shares authorized, 1,690,000 shares issued) 5,070,000 Paid-In Capital in Excess of Par-Common Stock 1,014,000 Retained Earnings 30,836,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Issued 454,700 shares of common stock at $8, receiving cash. b. Issued 11,800 shares of preferred 1% stock at $61. C. Purchased 46,500 shares of treasury common for S8 per share. d. Sold 20,700 shares of treasury common for $10 per share. e. Sold 5,700 shares of treasury common for $7 per share. f. Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock. Paid the cash dividends

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Journalize the entries to record the transactions.
**Selected Accounts in the Ledger of Parks Construction Inc.** At the beginning of the current year, the following selected accounts appear in the ledger of Parks Construction Inc.: 1. **Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued)**: $3,755,000 2. **Paid-In Capital in Excess of Par—Preferred Stock**: $165,220 3. **Common Stock, $3 par (5,000,000 shares authorized, 1,690,000 shares issued)**: $5,070,000 4. **Paid-In Capital in Excess of Par—Common Stock**: $1,014,000 5. **Retained Earnings**: $30,836,000 **Summary of Transactions Affecting Stockholders' Equity** During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Issued 454,700 shares of common stock at $8, receiving cash. b. Issued 11,800 shares of preferred 1% stock at $61. c. Purchased 46,500 shares of treasury common for $8 per share. d. Sold 20,700 shares of treasury common for $10 per share. e. Sold 5,700 shares of treasury common for $7 per share. f. Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock. g. Paid the cash dividends. **Explanation of Terms:** - **Common Stock**: Represents ownership in a company and a claim on part of the corporation's assets and earnings. - **Preferred Stock**: Stock that gives shareholders a higher claim on assets and earnings than common stock. - **Paid-In Capital in Excess of Par**: The amount paid by investors that is above the par value of the stock. - **Retained Earnings**: The cumulative total of all net income since the company started minus all dividends paid to shareholders. - **Treasury Stock**: Shares that were once part of the outstanding shares and were later bought back by the company. They do not pay dividends, have no voting rights, and should not be included in shares outstanding calculations. This information can help students and professionals understand how stock issuance and stock transactions contribute to a company's equity and overall financial position.
Transcribed Image Text:**Selected Accounts in the Ledger of Parks Construction Inc.** At the beginning of the current year, the following selected accounts appear in the ledger of Parks Construction Inc.: 1. **Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued)**: $3,755,000 2. **Paid-In Capital in Excess of Par—Preferred Stock**: $165,220 3. **Common Stock, $3 par (5,000,000 shares authorized, 1,690,000 shares issued)**: $5,070,000 4. **Paid-In Capital in Excess of Par—Common Stock**: $1,014,000 5. **Retained Earnings**: $30,836,000 **Summary of Transactions Affecting Stockholders' Equity** During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Issued 454,700 shares of common stock at $8, receiving cash. b. Issued 11,800 shares of preferred 1% stock at $61. c. Purchased 46,500 shares of treasury common for $8 per share. d. Sold 20,700 shares of treasury common for $10 per share. e. Sold 5,700 shares of treasury common for $7 per share. f. Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock. g. Paid the cash dividends. **Explanation of Terms:** - **Common Stock**: Represents ownership in a company and a claim on part of the corporation's assets and earnings. - **Preferred Stock**: Stock that gives shareholders a higher claim on assets and earnings than common stock. - **Paid-In Capital in Excess of Par**: The amount paid by investors that is above the par value of the stock. - **Retained Earnings**: The cumulative total of all net income since the company started minus all dividends paid to shareholders. - **Treasury Stock**: Shares that were once part of the outstanding shares and were later bought back by the company. They do not pay dividends, have no voting rights, and should not be included in shares outstanding calculations. This information can help students and professionals understand how stock issuance and stock transactions contribute to a company's equity and overall financial position.
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