Question

In: Accounting

Selected Stock Transactions The following selected accounts appear in the ledger of Parks Construction Inc. at...

Selected Stock Transactions

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

Preferred 2% Stock, $175 par (60,000 shares authorized, 30,000 shares issued) $5,250,000
Paid-In Capital in Excess of Par—Preferred Stock 1,050,000
Common Stock, $25 par (700,000 shares authorized, 250,000 shares issued) 6,250,000
Paid-In Capital in Excess of Par—Common Stock 810,000
Retained Earnings 28,323,000

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

Issued 70,000 shares of common stock at $32, receiving cash.

Issued 15,000 shares of preferred 2% stock at $193.

Purchased 42,000 shares of treasury common for $30 per share.

Sold 21,000 shares of treasury common for $33 per share.

Sold 14,000 shares of treasury common for $28 per share.

Declared cash dividends of $3.50 per share on preferred stock and $0.06 per share on common stock.

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 70,000 shares of common stock at $32, receiving cash.

b. Issued 15,000 shares of preferred 2% stock at $193.

c. Purchased 42,000 shares of treasury common for $30 per share.

d. Sold 21,000 shares of treasury common for $33 per share.

e. Sold 14,000 shares of treasury common for $28 per share.

f. Declared cash dividends of $3.50 per share on preferred stock and $0.06 per share on common stock.

g. Paid the cash dividends.

Solutions

Expert Solution

a Cash 2240000 =70000*32
     Common Stock 1750000 =70000*25
     Paid-In Capital in Excess of Par-Common Stock 490000
b Cash 2895000 =15000*193
       Preferred Stock 2625000 =15000*175
       Paid-In Capital in Excess of Par-Preferred Stock 270000
c Treasury Stock 1260000 =42000*30
       Cash 1260000
d Cash 693000 =21000*33
       Treasury Stock 630000 =21000*30
        Paid-In Capital from Sale of Treasury Stock 63000
e Cash 392000 =14000*28
Paid-In Capital from Sale of Treasury Stock 28000
       Treasury Stock 420000 =14000*30
f Cash Dividends 176280 =(30000+15000)*3.5+(250000+70000-42000+21000+14000)*0.06
        Cash Dividends Payable 176280
g Cash Dividends Payable 176280
       Cash 176280

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