Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below.Preferred stock subscriptions receivable $ 50,000Preferred stock, $10 par, 9% (200,000 shares authorized;20,000 shares issued) 200,000Preferred stock subscribed (10,000 shares) 100,000Paid-in capital in excess of par—preferred stock 40,000Common stock, $10 par (100,000 shares authorized;60,000 shares issued) 600,000Paid-in capital in excess of par—common stock 250,000Retained earnings 750,000During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity:(a) Received $20,000 for the balance due on subscriptions for 4,000 shares of preferred stock with a par value of $40,000 and issued the stock.(b) Purchased 10,000 shares of common treasury stock for $18 per share.(c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000.(d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000.(e) Sold 5,000 shares of common treasury stock for $100,000.(f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash.(g) Sold 3,000 shares of common treasury stock for $17 per share.Required1. Prepare general journal entries for the transactions, identifying each transaction by letter.2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000.3. Prepare the stockholders’ equity section of the balance sheet as ofDecember 31, 20--. Net income for the year was $825,000 and dividendsof $400,000 were paid.
Preferred stock, $10 par, 9% (200,000 shares authorized;
20,000 shares issued) 200,000
Preferred stock subscribed (10,000 shares) 100,000
Paid-in capital in excess of par—preferred stock 40,000
Common stock, $10 par (100,000 shares authorized;
60,000 shares issued) 600,000
Paid-in capital in excess of par—common stock 250,000
Retained earnings 750,000
During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity:
(a) Received $20,000 for the balance due on subscriptions for 4,000 shares of preferred stock with a par value of $40,000 and issued the stock.
(b) Purchased 10,000 shares of common
(c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000.
(d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000.
(e) Sold 5,000 shares of common treasury stock for $100,000.
(f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash.
(g) Sold 3,000 shares of common treasury stock for $17 per share.
Required
1. Prepare general
2.
3. Prepare the stockholders’ equity section of the
December 31, 20--. Net income for the year was $825,000 and dividends
of $400,000 were paid.
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