Question

In: Accounting

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of...

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:

Preferred 2% Stock, $100 par (60,000 shares authorized, 30,000 shares issued) $3,000,000
Paid-In Capital in Excess of Par—Preferred Stock 600,000
Common Stock, $25 par (600,000 shares authorized, 220,000 shares issued) 5,500,000
Paid-In Capital in Excess of Par—Common Stock 720,000
Retained Earnings 20,818,000

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

  1. Issued 60,000 shares of common stock at $28, receiving cash.
  2. Issued 15,000 shares of preferred 2% stock at $120.
  3. Purchased 36,000 shares of treasury common for $26 per share.
  4. Sold 18,000 shares of treasury common for $29 per share.
  5. Sold 12,000 shares of treasury common for $24 per share.
  6. Declared cash dividends of $2.00 per share on preferred stock and $0.06 per share on common stock.
  7. Paid the cash dividends.

Required:

Journalize the entries to record the transactions.

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Issued 60,000 shares of common stock at $28, receiving cash.

b. Issued 15,000 shares of preferred 2% stock at $120.

c. Purchased 36,000 shares of treasury common for $26 per share..

d. Sold 18,000 shares of treasury common for $29 per share.

e. Sold 12,000 shares of treasury common for $24 per share.

f. Declared cash dividends of $2 per share on preferred stock and $0.06 per share on common stock.

g. Paid the cash dividends.

Solutions

Expert Solution

a
Cash 1680000 =60000*28
       Common Stock 1500000 =60000*25
       Paid-In Capital in Excess of Par-Common Stock 180000
b
Cash 1800000 =15000*120
     Preferred Stock 1500000 =15000*100
     Paid-In Capital in Excess of Par-Preferred Stock 300000
c
Treasury Stock 936000 =36000*26
      Cash 936000
d
Cash 522000 =18000*29
    Treasury Stock 468000 =18000*26
    Paid-In Capital from Sale of Treasury Stock 54000
e
Cash 288000 =12000*24
Paid-In Capital from Sale of Treasury Stock 24000
    Treasury Stock 312000 =12000*26
f
Cash Dividends 106440 =(30000+15000)*2+(220000+60000-36000+18000+12000)*0.06
       Cash Dividends Payable 106440
g
Cash Dividends Payable 106440
      Cash 106440

ekkarill92 answered 1 week ago
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