Spangler Corporation's charter allows it to issue 25,000 shares of $100 parpreferred stock and 50,000 shares of $20 par common stock. The companyhad the following stock transactions during the past year:1. Issued 10,000 shares of common stock to the corporate founders inexchange for a building valued at $150,000 and equipment valued at$75.000.2. Sold 500 shares of preferred stock at $125 per share and 1,000 sharesof common stock at par to an investor.3. Sold 5.000 shares of common stock for $35 per share.4. Issued 2.000 shares of common stock with a market value of $40 pershare, and 750 shares of preferred stock with a market value of $145 pershare, for a lump sum of $200.000.5. Purchased at $25 per share, 2,000 shares of Spangler Corporationcommon stock.6. Sold 1,000 shares of treasury stock at $30 per share.7. Sold 1,000 shares of treasury stock at $18 per share.Instructions:Prepare journal entries for the transactions noted above. No other transactions have affected the stock accounts. Record all lump sum transactions using the proportional method and all treasury stock transactions using the cost method. **Spangler Corporation Stock Transactions Overview****Charter Details:**Spangler Corporation is chartered to issue:- 25,000 shares of $100 par preferred stock- 50,000 shares of $20 par common stock**Stock Transactions:**1. **Issuance for Assets**: - Issued 10,000 shares of common stock to founders - In exchange for: - Building valued at $150,000 - Equipment valued at $75,0002. **Sale of Stock**: - Sold: - 500 shares of preferred stock at $125 per share - 1,000 shares of common stock at par3. **Market Sale of Common Stock**: - Sold 5,000 shares of common stock at $35 per share.4. **Lump Sum Stock Issuance**: - Issued: - 2,000 shares of common stock with a market value of $40 per share - 750 shares of preferred stock with a market value of $145 per share - Total received: $200,0005. **Purchase of Treasury Stock**: - Purchased 2,000 shares of common stock at $25 per share.6. **Sale of Treasury Stock**: - First Sale: Sold 1,000 shares at $30 per share. - Second Sale: Sold 1,000 shares at $18 per share.**Instructions for Journal Entries:**Prepare journal entries for the transactions above. No other transactions have affected the stock accounts. - Record all lump sum transactions using the proportional method.- Record all treasury stock transactions using the cost method.This educational material is designed to help analyze, record, and understand the impact of stock transactions on corporate financial accounts.

Stockholder's Equity - Stockholder's Equity includes Common Stock, Preferred Stock, Paid in Capital,…

Answered: Spangler Corporation's charter allows…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Spangler Corporation's charter allows it to issue 25,000 shares of $100 par
preferred stock and 50,000 shares of $20 par common stock. The company
had the following stock transactions during the past year:
1. Issued 10,000 shares of common stock to the corporate founders in
exchange for a building valued at $150,000 and equipment valued at
$75.000.
2. Sold 500 shares of preferred stock at $125 per share and 1,000 shares
of common stock at par to an investor.
3. Sold 5.000 shares of common stock for $35 per share.
4. Issued 2.000 shares of common stock with a market value of $40 per
share, and 750 shares of preferred stock with a market value of $145 per
share, for a lump sum of $200.000.
5. Purchased at $25 per share, 2,000 shares of Spangler Corporation
common stock.
6. Sold 1,000 shares of treasury stock at $30 per share.
7. Sold 1,000 shares of treasury stock at $18 per share.

Instructions:
Prepare journal entries for the transactions noted above. No other transactions have affected the stock accounts. Record all lump sum transactions using the proportional method and all treasury stock transactions using the cost method.

**Spangler Corporation Stock Transactions Overview**

**Charter Details:**
Spangler Corporation is chartered to issue:
- 25,000 shares of $100 par preferred stock
- 50,000 shares of $20 par common stock

**Stock Transactions:**

1. **Issuance for Assets**:
- Issued 10,000 shares of common stock to founders
- In exchange for:
- Building valued at $150,000
- Equipment valued at $75,000

2. **Sale of Stock**:
- Sold:
- 500 shares of preferred stock at $125 per share
- 1,000 shares of common stock at par

3. **Market Sale of Common Stock**:
- Sold 5,000 shares of common stock at $35 per share.

4. **Lump Sum Stock Issuance**:
- Issued:
- 2,000 shares of common stock with a market value of $40 per share
- 750 shares of preferred stock with a market value of $145 per share
- Total received: $200,000

5. **Purchase of Treasury Stock**:
- Purchased 2,000 shares of common stock at $25 per share.

6. **Sale of Treasury Stock**:
- First Sale: Sold 1,000 shares at $30 per share.
- Second Sale: Sold 1,000 shares at $18 per share.

**Instructions for Journal Entries:**

Prepare journal entries for the transactions above. No other transactions have affected the stock accounts.
- Record all lump sum transactions using the proportional method.
- Record all treasury stock transactions using the cost method.

This educational material is designed to help analyze, record, and understand the impact of stock transactions on corporate financial accounts.

Expert Solution

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions