Question

Choctaw Co. completed the following transactions in Year 1, the first year of operation.

1. Issued 27,000 shares of $12 par common stock for $12 per share.
2. Issued 3,700 shares of $20 stated value preferred stock for $20 per share.
3. Purchased 1,700 shares of common stock as treasury stock for $14 per share.
4. Declared a $2,700 cash dividend on preferred stock.
5. Sold 1,100 shares of treasury stock for $16 per share.
6. Paid $2,700 cash for the preferred dividend declared in Event 4.
7. Earned cash revenues of $92,000 and incurred cash expenses of $48,000.
8. Appropriated $8,700 of retained earnings.

Required

a. Organize the transaction in accounts under an accounting equation.
b. Prepare a balance sheet as of December 31, Year 1.

• Required A

Organize the transaction in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding input needed.)

Choctaw Co. Accounting Equation Year 1 Event Assets = Liabilities Stockholders’ Equity Cash = Dividends Payable + Preferred Stock + Common Stock + Paid-in Capital in Excess of Par - Treasury Stock – Treasury Stock + Retained Earnings + Appropriated Retained Earnings Account Title for Retained Earnings 1. = + + + – + + 2. = + + + – + + 3. = + + + – + + 4. = + + + – + + 5. = + + + – + + 6. = + + + – + + 7a. = + + + – + + 7b. = + + + – + + 8. = + + + – + + Totals 0 = 0 + 0 + 0 + 0 – 0 + 0 + 0

Required B

	CHOCTAW CO. Balance Sheet As of December 31,Year 1 Assets Total assets $0 Liabilities Stockholders’ equity Total Paid-In Capital $0 Retained Earnings    Total Retained Earnings 0 Total Stockholders’ Equity    0 Total Liabilities and Stockholders’ Equity $0

Answer 1

Accounting Equation for the year 2018
Event	Assets	=	Liabilities	Stockholder's Equity
	Cash	=	Dividends Payable	+	Preferred Stock		Common Stock	+	Paid In Capital In Excess Treasury Stock	-	Treasury Stock	+	Retained Earnings	+	Appropriated Retained Earnings	Accounting Title Retained Earnings
1	$324,000.00						$324,000.00
2	$74,000.00				$74,000.00
3	($23,800.00)										$23,800.00
4			$2,700.00										($2,700.00)			Dividends
5	$17,600.00								$2,200.00		($15,400.00)
6	($2,700.00)		($2,700.00)
7a	$92,000.00												$92,000.00			Revenue
7b	($48,000.00)												($48,000.00)			Expenses
8													($8,700.00)		$8,700.00
Totals	$433,100.00		$0.00		$74,000.00		$324,000.00		$2,200.00		$8,400.00		$32,600.00		$8,700.00

Stockholder's Equity Section - Balance Sheet
Choctaw Co
As of December 31, 2018
Particulars		Amount
Stockholder's Equity:
Common stock	$324,000.00
Preferred stock	$74,000.00
Paid in capital in excess treasury stock	$2,200.00
Total Paid in Capital		$400,200.00
Retained Earnings:
Unappropriated	$32,600.00
Apporpriated	$8,700.00
Total retained earnings		$41,300.00
Treasury Stock		($8,400.00)
Total Stockholder's Equity		$433,100.00