Stockholder's equity section T-Accounts Journal entries Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Preferred Stock 550,000 Common Stock 650,625 v $ 1,200,625 v Additional Paid-in-Capital Paid-in-Capital in Excess of Par value -Preferred Stock 39,000 Paid-in-Capital in Excess of Par value - Common Stock 412,375 Paid-in-Capital from Treasury Stock 1,800 453,175 Total Paid-in-Capital 1,653,800 Retained Earnings 409,000 325,000 x Less: Treasury Stock - Common 80,300 $ 1,982,500 Total Stockholders' Equity

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Stockholders’ Equity: Transactions and Balance Sheet Presentation

The stockholders’ equity of Summit Corporation at January 1 follows:

7 Percent preferred stock, $100 par value, 20,000 shares authorized;  
5,000 shares issued and outstanding $500,000
Common stock, $15 par value, 100,000 shares authorized;  
40,000 shares issued and outstanding 600,000
Paid-in capital in excess of par value-Preferred stock 24,000
Paid-in capital in excess of par value-Common stock 360,000
Retained earnings 325,000
Total Stockholders' Equity $1,809,000

 

The following transactions, among others, occurred during the year:

Jan. 12 Announced a 3-for-1 common stock split, reducing the par value of the common stock to $5 per share. The authorization was increased to 300,000 shares.
Mar. 31 Converted $41,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock.
June 1 Acquired equipment with a fair market value of $65,000 in exchange for 500 shares of preferred stock.
Sept. 1 Acquired 10,000 shares of common stock for cash at $11 per share.
Oct. 12 Sold 1,500 treasury shares at $13 per share.
Nov. 21 Issued 5,000 shares of common stock at $12 per share.
Dec. 28 Sold 1,200 treasury shares at $10 per share.
  31 Closed net income of $84,000 to the Retained Earnings account.

 

Required

 

  • Prepare journal entries for the given transactions and post them to the T-accounts.  Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders’ equity accounts.
  • Prepare the stockholders’ equity section of the balance sheet at December 31.
Stockholder's equity section
T-Accounts
Journal entries
Do not use negative signs with your answers.
Stockholders' Equity
Paid in Capital
Preferred Stock
550,000
Common Stock
650,625 v $ 1,200,625 v
Additional Paid-in-Capital
Paid-in-Capital in Excess of Par value -Preferred Stock
39,000
Paid-in-Capital in Excess of Par value - Common Stock
412,375
Paid-in-Capital from Treasury Stock
1,800
453,175
Total Paid-in-Capital
1,653,800
Retained Earnings
409,000
325,000 x
Less: Treasury Stock - Common
80,300
$ 1,982,500
Total Stockholders' Equity
Transcribed Image Text:Stockholder's equity section T-Accounts Journal entries Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Preferred Stock 550,000 Common Stock 650,625 v $ 1,200,625 v Additional Paid-in-Capital Paid-in-Capital in Excess of Par value -Preferred Stock 39,000 Paid-in-Capital in Excess of Par value - Common Stock 412,375 Paid-in-Capital from Treasury Stock 1,800 453,175 Total Paid-in-Capital 1,653,800 Retained Earnings 409,000 325,000 x Less: Treasury Stock - Common 80,300 $ 1,982,500 Total Stockholders' Equity
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 7 images

Blurred answer
Knowledge Booster
Accounting for stockholder's equity
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
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education