Question
In: Accounting
Choctaw Co. completed the following transactions in 2018, the first year of operation: Issued 31,000 shares...
Choctaw Co. completed the following transactions in 2018, the first year of operation:
- Issued 31,000 shares of $10 par common stock for $10 per share.
- Issued 4,100 shares of $20 stated value preferred stock for $20 per share.
- Purchased 2,100 shares of common stock as treasury stock for $12 per share.
- Declared a $3,100 cash dividend on preferred stock.
- Sold 800 shares of treasury stock for $14 per share.
- Paid $3,100 cash for the preferred dividend declared in Event 4.
- Earned cash revenues of $100,000 and incurred cash expenses of $52,000.
- Appropriated $9,100 of retained earnings.
Required
-
Organize the transaction in accounts under an accounting equation.
-
Prepare the stockholders’ equity section of the balance sheet as of December 31, 2018.
Organize the transaction in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.)
| Choctaw Co. | ||||||||||||||||
| Accounting Equation for the Year 2018 | ||||||||||||||||
| Event | Assets | = | Liabilities | Stockholders’ Equity | ||||||||||||
| Cash | = | Dividens Payable | + | Preferred Stock | + | Common Stock | + | Paid-in Capital In Excess Treasury Stock | – | Treasury Stock | + | Retained Earnings | + | Appropriated Retained Earnings | Accounting Title Retained Earnings | |
| 1. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 2. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 3. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 4. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 5. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 6. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| 7a. | not attempted | =not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | –not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | not attempted |
| 7b. | not attempted | =not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | –not attempted | not attempted | +not attempted | not attempted | +not attempted | not attempted | not attempted |
| 8. | not attempted | = | not attempted | + | not attempted | + | not attempted | + | not attempted | – | not attempted | + | not attempted | + | not attempted | not attempted |
| Totals | 0 | = | 0 | + | 0 | + | 0 | + | 0 | – | 0 | + | 0 | + | 0 | |
Prepare the stockholders’ equity section of the balance sheet as of December 31, 2018. (Negative amount should be indicated by a minus sign.)
| CHOCTAW CO. | ||
| As of December 31, 2018 | ||
| Stockholders’ equity | ||
| not attempted | not attempted | |
| not attempted | not attempted | |
| not attempted | not attempted | |
| not attempted | not attempted | |
| Total Paid-In Capital | $0 | |
| Retained Earnings | ||
| not attempted | not attempted | |
| not attempted | not attempted | |
| Total Retained Earnings | 0 | |
| not attempted | not attempted | |
| Total Stockholders’ Equity | $0 | |
Solutions
Expert Solution
| Choctaw Co | ||||||||||||||||
| Accounting Equation for the year 2018 | ||||||||||||||||
| Event | Assets | = | Liabilities | Stockholder's Equity | ||||||||||||
| Cash | = | Dividends Payable | + | Preferred Stock | Common Stock | + | Paid In Capital In Excess Treasury Stock | - | Treasury Stock | + | Retained Earnings | + | Appropriated Retained Earnings | Accounting Title Retained Earnings | ||
| 1 | $310,000.00 | $310,000.00 | ||||||||||||||
| 2 | $82,000.00 | $82,000.00 | ||||||||||||||
| 3 | ($25,200.00) | $25,200.00 | ||||||||||||||
| 4 | $3,100.00 | ($3,100.00) | Dividends | |||||||||||||
| 5 | $11,200.00 | $1,600.00 | ($9,600.00) | |||||||||||||
| 6 | ($3,100.00) | ($3,100.00) | ||||||||||||||
| 7a | $100,000.00 | $100,000.00 | Revenue | |||||||||||||
| 7b | ($52,000.00) | ($52,000.00) | Expenses | |||||||||||||
| 8 | ($9,100.00) | $9,100.00 | ||||||||||||||
| Tototals | $422,900.00 | $0.00 | $82,000.00 | $310,000.00 | $1,600.00 | $15,600.00 | $35,800.00 | $9,100.00 | ||||||||
| CHOCTAW CO. | ||
| As of December 31, 2018 | ||
| Stockholders' Equity | ||
| Preferred Stock | $82,000.00 | |
| Common Stock | $310,000.00 | |
| Paid-In Capital Treasury Stock | $1,600.00 | |
| Total Paid-In Capital | $393,600.00 | |
| Retained Earnings | ||
| Unappropriated | $35,800.00 | |
| Appropriated | $9,100.00 | |
| Total Retained Earnings | $44,900.00 | |
| Less: Treasury Stock | -$15,600.00 | |
| Total Stockholders' Equity | $422,900.00 |
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