Stockholders’ Equity: Transactions and Balance Sheet PresentationThe stockholders’ equity accounts of Scott Corporation at January 1 follow:Common stock, $5 par value, 350,000 shares authorized; 150,000 shares issued and outstanding$750,000Paid-in capital in excess of par value (common stock)600,000Retained earnings346,000 During the year, the following transactions occurred:Jan.5Issued 10,000 shares of common stock for $13 cash per share. 18Purchased 4,000 shares of common stock as treasury stock at $15 cash per share.Mar.12Sold one-fourth of the treasury shares acquired January 18 for $18 per share.July17Sold 500 shares of the remaining treasury stock for $14 per share.Oct.1Issued 5,000 shares of eight percent, $25 par value preferred stock for $36 cash per share. These are the first preferred shares issued out of 50,000 authorized shares.Dec.31Closed the net income of $73,500 to the Retained Earnings account. RequiredPrepare 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. Journal EntriesT-AccountsBalance SheetsCashJan.05Answer Answer Jan.18Answer Answer Mar.12Answer Answer Jul.17Answer Answer Oct.01Answer Answer Preferred StockOct.01Answer Answer Bal.Answer Answer Common StockBeg. bal 750,000 Jan.05Answer Answer BalAnswer Answer Paid-in-Capital in Excess of Par Value - Preferred StockOct.01Answer Answer BalAnswer Answer Paid-in-Capital in Excess of Par Value - Common StockBeg. bal 600,000 Jan.5Answer Answer BalAnswer Answer Paid-in-Capital from Treasury StockMar.12Answer Answer Jul.17Answer Answer Bal.Answer Answer

Solution: Journal entry is an accounting entry to record every transaction takes place in an…

Answered: Stockholders’ Equity: Transactions and…

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

Stockholders’ Equity: Transactions and Balance Sheet Presentation

The stockholders’ equity accounts of Scott Corporation at January 1 follow:

Common stock, $5 par value, 350,000 shares authorized;
150,000 shares issued and outstanding	$750,000
Paid-in capital in excess of par value (common stock)	600,000
Retained earnings	346,000

During the year, the following transactions occurred:

Jan.	5	Issued 10,000 shares of common stock for $13 cash per share.
	18	Purchased 4,000 shares of common stock as treasury stock at $15 cash per share.
Mar.	12	Sold one-fourth of the treasury shares acquired January 18 for $18 per share.
July	17	Sold 500 shares of the remaining treasury stock for $14 per share.
Oct.	1	Issued 5,000 shares of eight percent, $25 par value preferred stock for $36 cash per share.
		These are the first preferred shares issued out of 50,000 authorized shares.
Dec.	31	Closed the net income of $73,500 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.

Journal Entries
T-Accounts
Balance Sheets

Cash
Jan.05	Answer	Answer
Jan.18	Answer	Answer
Mar.12	Answer	Answer
Jul.17	Answer	Answer
Oct.01	Answer	Answer

Preferred Stock
Oct.01	Answer	Answer
Bal.	Answer	Answer

Common Stock
Beg. bal		750,000
Jan.05	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital in Excess of Par Value - Preferred Stock
Oct.01	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital in Excess of Par Value - Common Stock
Beg. bal		600,000
Jan.5	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital from Treasury Stock
Mar.12	Answer	Answer
Jul.17	Answer	Answer
Bal.	Answer	Answer

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

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