Chapter 10, Problem 1CP

Continuing Problem

This problem continues our accounting for Fitness Equipment Doctor, Inc., from Chapter 9Q. Fitness Equipment Doctor, Inc., has been authorized to sell 100,000 shares of $5 par value common stock and 40,000 shares of $10 par, 15% preferred stock. During the year, Fitness Equipment Doctor had the following transactions related to stockholders’ equity:

Mar 1	Issued 7,000 shares of common stock to Adam Mazella in exchange for $22,000 cash and a truck with a market value of $13,000.
Apr 13	Issued an additional 2,000 shares of common stock to Adam Mazella for 810,000 cash.
Aug 18	Sold 9.000 shares of common stock to investors for $53,000.
Sep 6	Sold 1,000 shares of preferred stock to investors for $25,000.
Oct 22	Purchased 1,200 shares of common stock for $18 per share to hold in the company’s treasury.
Nov 14	Declared a $12,000 dividend payable on December 15 to stockholders on record on December 1. Used separate payable accounts for preferred and common dividends.
Dec 15	Paid the dividend.
Dec 21	Sold 400 shares of treasury stock for $24 per share

Requirements

1. 1. Record the transactions in the journal. Explanations are not required.
2. 2. Prepare the stockholders’ equity section of the balance sheet at December 31, 2018, assuming Fitness Equipment Doctor, Inc., earned $143,650 of net income during the year. In addition to the dividends paid on December 15, $5,800 of dividends were paid earlier in the year.