Chapter 20, Problem 1MP

Stockholders’ equity accounts and other related accounts of Gonzales Company as of January 1, 20--, the beginning of its fiscal year, are shown below.

(a)    Received $20,000 for the balance due on subscriptions for 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 Si00,000.

(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. 1. Prepare general journal entries for the transactions, identifying each transaction by letter.
2. 2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000.
3. 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.