Question

Solve the following problem.

Selected stock transactions

CHART OF ACCOUNTSParks Construction Inc.General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense

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, 75,100 shares issued)	$3,755,000
Paid-In Capital in Excess of Par—Preferred Stock	165,220
Common Stock, $3 par (5,000,000 shares authorized, 2,020,000 shares issued)	6,060,000
Paid-In Capital in Excess of Par—Common Stock	1,212,000
Retained Earnings	35,446,000

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

Jan.	5	Issued 519,600 shares of common stock at $8, receiving cash.
Feb.	10	Issued 10,800 shares of preferred 1% stock at $61.
Mar.	19	Purchased 46,400 shares of treasury common for $8 per share.
May	16	Sold 20,800 shares of treasury common for $10 per share.
Aug.	25	Sold 5,600 shares of treasury common for $7 per share.
Dec.	6	Declared cash dividends of $0.50 per share on preferred stock and $0.10 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.

Answer 1

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

Date	Account and explanation	debit	credit
Jan 5	Cash (519600*8)	4156800
	Common Stock		1558800
	Paid in capital in excess of par value-Common Stock		2598000
	(To record common Stock)
Feb 10	Cash (10800*61)	658800
	Preferred stock (10800*50)		540000
	paid in capital in excess of par value-Preferres stock		118800
	(To record preferred stock)
Mar 19	Treasury stock (46400*8)	371200
	Cash		371200
	(To record purchase treasury stock)
May 16	Cash	208000
	Treasury stock (20800*8)		166400
	Paid in capital from sale of treasury stock		41600
	(To record purchase treasury stock)
Aug 25	Cash (5600*7)	39200
	Paid in capital from sale of treasury stock	5600
	Treasury stock		44800
	(To record sale of treasury stock)
Dec 6	Cash dividend	294910
	Cash dividend payable		294910
	(To record dividend declared)
Dec 31	Cash dividend payable	294910
	Cash		294910
	To record dividend paid)