At the beginning of 20X1, the accounting records of Friends Corp. reported the following: $ 228,750 Preferred shares, 7,500 shares outstanding, no-par Common shares, 181,400 shares outstanding, no-par Contributed capital on common share retirement Retained earnings 477,082 111,100 555, 500 During the year, the company acquired and retired shares, while other shares were issued: 15 March 25,400 common shares bought and retired at $4 per share 16 March 4,300 preferred shares bought and retired at $32.90 per share 20 May 9,500 common shares bought and retired at $1 per share 25 May 1,900 preferred shares bought and retired at $18.30 per share 30 May 11,000 common shares issued at $10.30 per share 15 Nov. 5,100 common shares bought and retired at $30 per share

At the beginning of 20X1, the accounting records of Friends Corp. reported the following: $ 228,750 Preferred shares, 7,500 shares outstanding, no-par Common shares, 181,400 shares outstanding, no-par Contributed capital on common share retirement Retained earnings 477,082 111,100 555, 500 During the year, the company acquired and retired shares, while other shares were issued: 15 March 25,400 common shares bought and retired at $4 per share 16 March 4,300 preferred shares bought and retired at $32.90 per share 20 May 9,500 common shares bought and retired at $1 per share 25 May 1,900 preferred shares bought and retired at $18.30 per share 30 May 11,000 common shares issued at $10.30 per share 15 Nov. 5,100 common shares bought and retired at $30 per share

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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On October 10, the stockholders’ equity section of Sherman Systems appears as follows. Common stock–$10 par value, 5,200 shares authorized, issued, and outstanding $ 880,000 Paid-in capital in excess of par value, common stock 296,000 Retained earnings 992,000 Total stockholders’ equity $ 2,168,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 6,600 shares of its own common stock at $41 per share on October 11. Sold 1,400 treasury shares on November 1 for $47 cash per share. Sold all remaining treasury shares on November 25 for $40 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase. Record the reissue of the remaining shares of the treasury stock for $40 cash per share. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
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When Crossett Corporation was organized in January Year 1, it immediately issued 4,700 shares of $48 par, 8 percent, cumulative preferred stock and 12,000 shares of $8 par common stock. Its earnings history is as follows: Year 1, net loss of $12,700; Year 2, net income of $58,700; Year 3, net income of $119,700. The corporation did not pay a dividend in Year 1. b. Assume that the board of directors declares a $55,596 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? (Amounts to be deducted should be indicated with minus sign.)