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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 (50,000 shares authorized, 25,000 shares issued) $2,500,000
Paid-In Capital in Excess of Par—Preferred Stock 400,000
Common Stock, $15 par (800,000 shares authorized, 290,000 shares issued) 4,350,000
Paid-In Capital in Excess of Par—Common Stock 570,000
Retained Earnings 16,578,000

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

  1. Issued 80,000 shares of common stock at $21, receiving cash.
  2. Issued 13,000 shares of preferred 2% stock at $116.
  3. Purchased 48,000 shares of treasury common for $20 per share.
  4. Sold 24,000 shares of treasury common for $23 per share.
  5. Sold 16,000 shares of treasury common for $18 per share.
  6. Declared cash dividends of $2.00 per share on preferred stock and $0.10 per share on common stock.
  7. Paid the cash dividends.

Journalize the entries to record the transactions.

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

Required:

a. Issued 80,000 shares of common stock at $21, receiving cash.

Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock

b. Issued 13,000 shares of preferred 2% stock at $116.

Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock

c. Purchased 48,000 shares of treasury common for $20 per share.

Treasury Stock
Cash

d. Sold 24,000 shares of treasury common for $23 per share.

Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock

e. Sold 16,000 shares of treasury common for $18 per share.

Cash
Paid-In Capital from Sale of Treasury Stock
Treasury Stock

f. Declared cash dividends of $2.00 per share on preferred stock and $0.10 per share on common stock.

Cash Dividends
Cash Dividends Payable

g. Paid the cash dividends.

Cash Dividends Payable
Cash

Solutions

Expert Solution

TR Account titles & Explanations Debit Credit
a) Cash (80000*21) 1680000
Common stock (80000*15) 1200000
paid in capital in excess of par -CS 480000
b) Cash (13000*116) 1508000
Preferred Stock 1300000
Paid in capital in excess of par-PS 208000
c) Treasusry stock (48000*20) 960000
cash 960,000
d) cash (24000*23) 552000
Treasury stock (24000*20) 480000
paid in capital from sale of Treasury stock 72000
e) Cash (16000*18) 288000
paid in capital from sale of Treasury stock 32000
Treasury stock (16000*20) 320000
f) Cash dividends 112200
Dividends payable 112,200
(38000*2+362000*.1)
g) Dividends payable 112,200
cash 112,200

ekkarill92 answered 2 months ago
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