Concept explainers
Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below.
Preferred stock, $10 par, 9% (200,000 shares authorized; 20,000 shares issued) 200,000
Preferred stock subscribed (10,000 shares) 100,000
Paid-in capital in excess of par—preferred stock 40,000
Common stock, $10 par (100,000 shares authorized; 60,000 shares issued) 600,000
Paid-in capital in excess of par—common stock 250,000
During 20--, Gonzales Company completed the following transactions affecting stockholders’ equity:
- (a) Received $20,000 for the balance due on subscriptions for 4,000 shares of preferred stock with a par value of $40,000 and issued the stock.
- (b) Purchased 10,000 shares of common
treasury stock for $18 per share. - (c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000.
- (d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000.
- (e) Sold 5,000 shares of common treasury stock for $100,000.
- (f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash.
- (g) Sold 3,000 shares of common treasury stock for $17 per share.
REQUIRED
- 1. Prepare general
journal entries for the transactions, identifying each transaction by letter. - 2.
Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000. - 3. Prepare the stockholders’ equity section of the
balance sheet as of December 31, 20--. Net income for the year was $825,000 and dividends of $400,000 were paid.
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Chapter 20 Solutions
COLLEGE ACCT.,CH.1-15-CENGAGENOW(2TERM)
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