Elk River Corporation sells and services pipe welding equipment in Wyoming. The following selected accounts appear in the ledger of Elk River Corporation on Janu- ary 1, 2006, the beginning of the current fiscal year: Preferred 2% Stock, $100 par (80,000 shares authorized, 18,000 shares issued).. . Paid-In Capital in Excess of Par-Preferred Stock.. Common Stock, $10 par (800,000 shares authorized, 500,000 shares issued)... .... Paid-In Capital in Excess of Par-Common Stock Retained Earnings $1,800,000 ...... ....... 172,500 5,000,000 1,236,000 6,450,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Purchased 60,000 shares of treasury common for $1,080,000. b. Sold 20,000 shares of treasury common for $420,000. c. Sold 7,000 shares of preferred 2% stock at $108. d. Issued 40,000 shares of common stock at $23, receiving cash. e. Sold 35,000 shares of treasury common for $595,000. f. Declared cash dividends of $2 per share on preferred stock and $0.16 per share on common stock. g. Paid the cash divickends. Instructions Journalize the entries to record the transactions. Identify cach entry by letter.

Elk River Corporation sells and services pipe welding equipment in Wyoming. The following selected accounts appear in the ledger of Elk River Corporation on Janu- ary 1, 2006, the beginning of the current fiscal year: Preferred 2% Stock, $100 par (80,000 shares authorized, 18,000 shares issued).. . Paid-In Capital in Excess of Par-Preferred Stock.. Common Stock, $10 par (800,000 shares authorized, 500,000 shares issued)... .... Paid-In Capital in Excess of Par-Common Stock Retained Earnings $1,800,000 ...... ....... 172,500 5,000,000 1,236,000 6,450,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Purchased 60,000 shares of treasury common for $1,080,000. b. Sold 20,000 shares of treasury common for $420,000. c. Sold 7,000 shares of preferred 2% stock at $108. d. Issued 40,000 shares of common stock at $23, receiving cash. e. Sold 35,000 shares of treasury common for $595,000. f. Declared cash dividends of $2 per share on preferred stock and $0.16 per share on common stock. g. Paid the cash divickends. Instructions Journalize the entries to record the transactions. Identify cach entry by letter.

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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