The post-closing trial balance of Crane Corporation at December 31, 2024, contains the following shareholders' equity accounts: $5 noncumulative preferred shares (10,200 issued) Common shares (394,600 issued) Retained earnings A review of the accounting records reveals the following: 1. 2. 3. 4. 5. 6. $1,071,000 1,966,400 3,146,400 The January 1, 2024, balance in Preferred Shares was $1,071,000, Common Shares was $1,272,000 (318,000 shares), the balance in Contributed Surplus-Reacquisition of Common Shares was $30,600, and the balance in Retained Earnings was $2,442,000. One of the company's shareholders needed cash for a personal expenditure. On January 15, the company agreed to reacquire 20,400 shares from this shareholder for $7 per share. On July 1, the company corrected a prior period error that resulted in an increase to the Long-Term Investment account, as well as to the prior year's profit of $252,000 before income tax. On October 1, 97,000 common shares were sold for $8 per share. The preferred shareholders' dividend was declared and paid in 2024 for two quarters. Due to a cash shortage, the last two quarters' dividends were not declared or paid. Profit for the year before income tax was $762,000. The company has a 25% income tax rate.
The post-closing trial balance of Crane Corporation at December 31, 2024, contains the following shareholders' equity accounts: $5 noncumulative preferred shares (10,200 issued) Common shares (394,600 issued) Retained earnings A review of the accounting records reveals the following: 1. 2. 3. 4. 5. 6. $1,071,000 1,966,400 3,146,400 The January 1, 2024, balance in Preferred Shares was $1,071,000, Common Shares was $1,272,000 (318,000 shares), the balance in Contributed Surplus-Reacquisition of Common Shares was $30,600, and the balance in Retained Earnings was $2,442,000. One of the company's shareholders needed cash for a personal expenditure. On January 15, the company agreed to reacquire 20,400 shares from this shareholder for $7 per share. On July 1, the company corrected a prior period error that resulted in an increase to the Long-Term Investment account, as well as to the prior year's profit of $252,000 before income tax. On October 1, 97,000 common shares were sold for $8 per share. The preferred shareholders' dividend was declared and paid in 2024 for two quarters. Due to a cash shortage, the last two quarters' dividends were not declared or paid. Profit for the year before income tax was $762,000. The company has a 25% income tax rate.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The post-closing trial balance of Crane Corporation at December 31, 2024, contains the following shareholders' equity accounts:
$5 noncumulative preferred shares (10,200 issued)
Common shares (394,600 issued)
Retained earnings
A review of the accounting records reveals the following:
1.
2.
3.
4.
5.
6.
$1,071,000
1,966,400
3,146,400
The January 1, 2024, balance in Preferred Shares was $1,071,000, Common Shares was $1,272,000 (318,000 shares), the
balance in Contributed Surplus-Reacquisition of Common Shares was $30,600, and the balance in Retained Earnings was
$2,442,000.
One of the company's shareholders needed cash for a personal expenditure. On January 15, the company agreed to reacquire
20,400 shares from this shareholder for $7 per share.
On July 1, the company corrected a prior period error that resulted in an increase to the Long-Term Investment account, as
well as to the prior year's profit of $252,000 before income tax.
On October 1, 97,000 common shares were sold for $8 per share.
The preferred shareholders' dividend was declared and paid in 2024 for two quarters. Due to a cash shortage, the last two
quarters' dividends were not declared or paid.
Profit for the year before income tax was $762,000. The company has a 25% income tax rate.
Transcribed Image Text:Open general ledger accounts for the shareholders' equity accounts listed in item (1) above and enter opening balances.
Date Explanation Ref.
✓
Jan. 1
Date Explanation Ref.
Jan. 1
Balance
Jan. 1
Balance
Date Explanation Ref.
Balance
✓
Jan. 1 Balance
✓
Date Explanation Ref.
✓
Debit
Debit
Contributed Surplus-Reacquisition of Common Shares
Debit
Preferred Shares
Common Shares
Debit
Retained Earnings
Credit
Credit
Credit
Credit
Balance
Balance
Balance
Balance
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