The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2018, is as follows: Shareholders’ Equity   Preferred stock, $100 par value; authorized, 300,000 shares; issued, 32,500 shares $3,250,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 442,000 shares 2,210,000 Paid-in capital in excess of par—preferred 87,000 Paid-in capital in excess of par—common 875,000 Retained earnings 2,980,000   $9,402,000   The following events occurred during 2019: Jan. 5 10,000 shares of authorized and unissued common stock were sold for $6 per share. 16 12,000 shares of authorized and unissued preferred stock were sold for $107 per share. Apr. 1 78,000 shares of common stock were repurchased for the treasury at a price of $17 per share. Superior uses the cost method to account for treasury stock. Sept. 1 2,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $280,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share. Dec. 1 25,000 shares of treasury stock are reissued at a price of $25 per share.   Required: 1. Prepare journal entries for each of the above transactions. 2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2019. 3. Calculate Superior’s legal capital at December 31, 2019.

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
The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2018, is as follows:
Shareholders’ Equity  
Preferred stock, $100 par value; authorized, 300,000 shares; issued, 32,500 shares $3,250,000
Common stock, $5 par value; authorized, 2,000,000 shares; issued, 442,000 shares 2,210,000
Paid-in capital in excess of par—preferred 87,000
Paid-in capital in excess of par—common 875,000
Retained earnings 2,980,000
  $9,402,000
 
The following events occurred during 2019:
Jan. 5 10,000 shares of authorized and unissued common stock were sold for $6 per share.
16 12,000 shares of authorized and unissued preferred stock were sold for $107 per share.
Apr. 1 78,000 shares of common stock were repurchased for the treasury at a price of $17 per share. Superior uses the cost method to account for treasury stock.
Sept. 1 2,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $280,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share.
Dec. 1 25,000 shares of treasury stock are reissued at a price of $25 per share.
 
Required:
1. Prepare journal entries for each of the above transactions.
2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2019.
3. Calculate Superior’s legal capital at December 31, 2019.
CHART OF ACCOUNTS
Superior Corporation
General Ledger
  ASSETS
111 Cash
121 Accounts Receivable
141 Inventory
152 Prepaid Insurance
180 Land
181 Equipment
189 Accumulated Depreciation
  LIABILITIES
211 Accounts Payable
231 Salaries Payable
250 Unearned Revenue
261 Income Taxes Payable
  EQUITY
305 Preferred Stock
311 Common Stock
318 Additional Paid-in Capital on Preferred Stock
320 Additional Paid-in Capital on Common Stock
321 Additional Paid-in Capital on Treasury Stock
331 Retained Earnings
335 Treasury Stock
  REVENUE
411 Sales Revenue
  EXPENSES
500 Cost of Goods Sold
511 Insurance Expense
512 Utilities Expense
521 Salaries Expense
532 Bad Debt Expense
540 Interest Expense
541 Depreciation Expense
559 Miscellaneous Expenses
910

Income Tax Expense

PAGE 1
 
GENERAL JOURNAL
 
  DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
1
 
 
 
 
 
2
 
 
 
 
 
3
 
 
 
 
 
4
 
 
 
 
 
5
 
 
 
 
 
6
 
 
 
 
 
7
 
 
 
 
 
8
 
 
 
 
 
9
 
 
 
 
 
10
 
 
 
 
 
11
 
 
 
 
 
12
 
 
 
 
 
13
 
 
 
 
 
14
 
 
 
 
 
PAGE 1
GENERAL JOURNAL
DATE
ACCOUNT TITLE
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
7
8
10
11
12
13
14
Transcribed Image Text:PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 7 8 10 11 12 13 14
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 6 images

Blurred answer
Knowledge Booster
Earning per share and Dilutive securities
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