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:

  1. Issued 31,000 shares of $10 par common stock for $10 per share.
  2. Issued 4,100 shares of $20 stated value preferred stock for $20 per share.
  3. Purchased 2,100 shares of common stock as treasury stock for $12 per share.
  4. Declared a $3,100 cash dividend on preferred stock.
  5. Sold 800 shares of treasury stock for $14 per share.
  6. Paid $3,100 cash for the preferred dividend declared in Event 4.
  7. Earned cash revenues of $100,000 and incurred cash expenses of $52,000.
  8. Appropriated $9,100 of retained earnings.

Required

  1. Organize the transaction in accounts under an accounting equation.

  1. 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

ekkarill92 answered 2 years ago
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