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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 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued) $3,980,000
Paid-In Capital in Excess of Par—Preferred Stock 159,200
Common Stock, $3 par (5,000,000 shares authorized, 1,870,000 shares issued) 5,610,000
Paid-In Capital in Excess of Par—Common Stock 1,215,500
Retained Earnings 31,497,000

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

Jan. 5 Issued 532,900 shares of common stock at $9, receiving cash.
Feb. 10 Issued 11,000 shares of preferred 1% stock at $58.
Mar. 19 Purchased 45,400 shares of treasury common for $8 per share.
May 16 Sold 21,400 shares of treasury common for $10 per share.
Aug. 25 Sold 4,300 shares of treasury common for $7 per share.
Dec. 6 Declared cash dividends of $0.50 per share on preferred stock and $0.07 per share on common stock.
31 Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

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Solutions

Expert Solution

S. No. Date Description post ref debit Credit assets liabilities equity
1 jan 5 . Issue 532900 common stock @9

4796100

(532900x9)

1598700 (532900x3)

3197400 (532900x6)

 Cash (dr)

Common stock (cr)

Paid in capital in excess of par - common stock (cr)
2 . Feb 10 issued 11000 preferred 1% stock@58 638000 (11000x58)

550000

(11000x50)

88000

(11000x8)

 Cash (dr)

Preferred 1% stock (cr)

Paid in capital in excess of par - preferred stock (cr)
3. Mar 19 purchased 45400 treasury common @ 8 363200 363200 cash (cr) treasury stock (dr)
4 may 16 sold 21400 treasury common @ 10 214000

171200 (21400x8)

42800 (21400x2)

 Cash (dr)

Treasury stock (cr)

Paid in capital - treasury (cr)
5 aug 25 sold 4300 treasury common @ 7

30100(4300x7)

4300 (4300x1)

 34400 (4300x8) cash (dr)

Treasury stock (cr)

Paid in capital - treasury (dr)
6 Dec 6 dividend on preferred as well as common stock declared 41424 (35924+5500) 41424 Dividend payable (cr) Retained earnings (Dr)
7 Dec 31 paid div. In cash 41424 41424 cash (cr) dividend payable (dr)

Note :-

Calculation of amount to be declared

On common stock (532900-45400+21400+4300)x0.07 = $35924

On preferred stock 11000x0.5 = $5500

ekkarill92 answered 2 years ago
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