A&K Corporation was established in 2016. A&K has authorized 50,000 shares of common stock, par value...

A&K Corporation was established in 2016. A&K has authorized 50,000 shares of common stock, par value $1 per share, and 10,000 authorized shares of 9% preferred stock, par value $20 per share. Net Income for 2016 was $245,000. The following transactions took place during 2016: January 1 Issued 40,000 shares of common stock for cash at $30 per share. February 1 Issued 7,000 shares of preferred stock for cash of $60 per share. June 1 Repurchased 8,000 shares of L&D common stock at $25 per share. August 1 Reissued 1,000 shares of the treasury stock at $26 per share. December 1 Declared cash dividends on Common Stock only totaling $65,000 to be paid on January 15, 2017 to owners on record as of December 31, 2016. Required: Please show calculations a)Prepare journal entries for each of the above transactions. b) Calculate Ending Retained Earnings c.)Prepare the Stockholders' Equity section of the Balance Sheet in good format.

Expert Solution

1-
Journal entries
date	explanantion	debit	credit
1-Jan	cash	1200000
	common stock		40000
	additional paid in capital -common stock		1160000

1-Feb	cash	4200000
	preferred stock		140000
	additional paid in capital - preferred stock		4060000

1-Jun	treasury stock	200000
	cash		200000

1-Dec	dividend payable	65000
	cash		65000

2-
Ending retained earning
net income		245000
less dividend		65000
Year end balance in retained earning		180000

3-
Statement of shareholders equity
common stock		40000
preferred stock		140000
additional paid in capital -common stock		1160000
additional paid in capital - preferred stock		4060000
retained earning		180000
treasury stock		-200000
balance in shareholders equity		5380000

ekkarill92 answered 10 months ago

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