P15-1 (LO1,2,3,4) Equity Transactions and Statement Preparation On January 5, 2020, Phelps Corporation received a charter granting the right to issue common and preferred stock as provided below: Cumulative and nonparticipating preferred stock: Number of shares authorized 5,000 shares Par value $ 100 per share Dividend rate 8% Common stock: Number of shares authorized 50,000 shares Par value $ 10 per share It then completed these transactions. Jan. 11 Issued common stock Number of shares 20,000 Issue price per share $ 16.00 Feb. 1 Issued preferred stock to Sanchez Corp. for assets with the following values: Fair value of equipment $ 50,000 Fair value of a factory building $ 160,000 Appraised value of land $ 270,000 Number of shares issued 4,000 Jul. 29 Purchased shares of common stock (use the cost method) Number of shares purchased 1,800 Purchase price per share $ 17.00 Aug. 10 Sold treasury shares Number of shares sold 1,800 Selling price per share $ 14.00 Dec. 31 Declared cash dividend on the common stock Dividend per share $ 0.25 Declared the preferred dividend Dec. 31 Closed the Income Summary account. Net income during 2020 $ 175,700 Instructions: (a) Record the journal entries for the transactions listed above. Debit Credit Jan. 11 Feb. 1 Jul. 29 Aug. 10 Dec. 31 Common stock cash dividend Preferred stock cash dividend Total cash dividend Dec. 31 (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2020.
P15-1 (LO1,2,3,4) Equity Transactions and Statement Preparation On January 5, 2020, Phelps Corporation received a charter granting the right to issue common and preferred stock as provided below: Cumulative and nonparticipating preferred stock: Number of shares authorized 5,000 shares Par value $ 100 per share Dividend rate 8% Common stock: Number of shares authorized 50,000 shares Par value $ 10 per share It then completed these transactions. Jan. 11 Issued common stock Number of shares 20,000 Issue price per share $ 16.00 Feb. 1 Issued preferred stock to Sanchez Corp. for assets with the following values: Fair value of equipment $ 50,000 Fair value of a factory building $ 160,000 Appraised value of land $ 270,000 Number of shares issued 4,000 Jul. 29 Purchased shares of common stock (use the cost method) Number of shares purchased 1,800 Purchase price per share $ 17.00 Aug. 10 Sold treasury shares Number of shares sold 1,800 Selling price per share $ 14.00 Dec. 31 Declared cash dividend on the common stock Dividend per share $ 0.25 Declared the preferred dividend Dec. 31 Closed the Income Summary account. Net income during 2020 $ 175,700 Instructions: (a) Record the journal entries for the transactions listed above. Debit Credit Jan. 11 Feb. 1 Jul. 29 Aug. 10 Dec. 31 Common stock cash dividend Preferred stock cash dividend Total cash dividend Dec. 31 (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 81PSA
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Question
P15-1 (LO1,2,3,4) Equity Transactions and Statement Preparation | ||||||
On January 5, 2020, Phelps Corporation received a charter granting the right to issue common and |
||||||
Cumulative and nonparticipating preferred stock: | ||||||
Number of shares authorized | 5,000 | shares | ||||
Par value | $ 100 | per share | ||||
8% | ||||||
Common stock: | ||||||
Number of shares authorized | 50,000 | shares | ||||
Par value | $ 10 | per share | ||||
It then completed these transactions. | ||||||
Jan. 11 | Issued common stock | |||||
Number of shares | 20,000 | |||||
Issue price per share | $ 16.00 | |||||
Feb. 1 | Issued preferred stock to Sanchez Corp. for assets with the following values: | |||||
Fair value of equipment | $ 50,000 | |||||
Fair value of a factory building | $ 160,000 | |||||
Appraised value of land | $ 270,000 | |||||
Number of shares issued | 4,000 | |||||
Jul. 29 | Purchased shares of common stock (use the cost method) | |||||
Number of shares purchased | 1,800 | |||||
Purchase price per share | $ 17.00 | |||||
Aug. 10 | Sold treasury shares | |||||
Number of shares sold | 1,800 | |||||
Selling price per share | $ 14.00 | |||||
Dec. 31 | Declared cash dividend on the common stock | |||||
Dividend per share | $ 0.25 | |||||
Declared the preferred dividend | ||||||
Dec. 31 | Closed the Income Summary account. | |||||
Net income during 2020 | $ 175,700 | |||||
Instructions: | ||||||
(a) | Record the |
|||||
Debit | Credit | |||||
Jan. 11 | ||||||
Feb. 1 | ||||||
Jul. 29 | ||||||
Aug. 10 | ||||||
Dec. 31 | ||||||
Common stock cash dividend | ||||||
Preferred stock cash dividend | ||||||
Total cash dividend | ||||||
Dec. 31 | ||||||
(b) | Prepare the |
|||||
PHELPS CORPORATION | ||||||
Stockholders' Equity | ||||||
December 31, 2020 | ||||||
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