Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Willis Corporation at January 1 appear below: 8 Percent preferred stock, $10 par value, 50,000 shares authorized; 6,800 shares issued and outstanding Common stock, $10 par value, 200,000 shares authorized; 50,000 shares issued and outstanding $68,000 500,000 Paid-in capital in excess of par value-Preferred stock 68,000 Paid-in capital in excess of par value-Common stock Retained earnings 200,000 270,000 During the year, the following transactions occurred: Jan. 10 Issued 35,000 shares of common stock for $18 cash per share, 23 Purchased 10,000 shares of common stock as treasury stock at $19 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share. July 15 Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $24 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account. Required Prepare journal entries to record the foregoing transactions and post to 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 December 31 stockholders' equity section of the balance sheet.
Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Willis Corporation at January 1 appear below: 8 Percent preferred stock, $10 par value, 50,000 shares authorized; 6,800 shares issued and outstanding Common stock, $10 par value, 200,000 shares authorized; 50,000 shares issued and outstanding $68,000 500,000 Paid-in capital in excess of par value-Preferred stock 68,000 Paid-in capital in excess of par value-Common stock Retained earnings 200,000 270,000 During the year, the following transactions occurred: Jan. 10 Issued 35,000 shares of common stock for $18 cash per share, 23 Purchased 10,000 shares of common stock as treasury stock at $19 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share. July 15 Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $24 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account. Required Prepare journal entries to record the foregoing transactions and post to 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 December 31 stockholders' equity section of the balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Stockholders' Equity: Transactions and Balance Sheet Presentation
The stockholders' equity accounts of Willis Corporation at January 1 appear below:
8 Percent preferred stock, $10 par value, 50,000 shares authorized;
6,800 shares issued and outstanding
Common stock, $10 par value, 200,000 shares authorized;
50,000 shares issued and outstanding
$68,000
500,000
Paid-in capital in excess of par value-Preferred stock
68,000
Paid-in capital in excess of par value-Common stock
Retained earnings
200,000
270,000
During the year, the following transactions occurred:
Jan. 10 Issued 35,000 shares of common stock for $18 cash per share,
23 Purchased 10,000 shares of common stock as treasury stock at $19 per share.
Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share.
July 15 Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000.
Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $24 per share.
Dec. 31 Closed the net income of $59,000 to the Retained Earnings account.
Required
Prepare journal entries to record the foregoing transactions and post to 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 December 31 stockholders' equity section of the balance sheet.
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