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The stockholders’ equity accounts of Wildhorse Co. on January 1, 2022, were as follows. Preferred Stock...

The stockholders’ equity accounts of Wildhorse Co. on January 1, 2022, were as follows.

Preferred Stock (9%, $100 par noncumulative, 5,000 shares authorized) $350,000
Common Stock ($10 stated value, 800,000 shares authorized) 1,410,000
Paid-in Capital in Excess of Par Value—Preferred Stock 50,000
Paid-in Capital in Excess of Stated Value —Common Stock 890,000
Retained Earnings 790,000
Treasury Stock (7,400 common shares) 59,200



During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Mar 1 Issued 6,600 shares of common stock for $90 per share.
June 22 Purchased 1,200 additional shares of common treasury stock at $11 per share.
Sept. 1 Declared a 9% cash dividend on preferred stock, payable October 1.
Oct. 1 Paid the dividend declared on September 1.
Dec. 1 Declared a $0.60 per share cash dividend to common stockholders of record on December 15, payable December 31, 2022.
31 Determined that net income for the year was $118,000. Paid the dividend declared on December 1.


Journalize the transactions for the dates shown. Include entries to close net income and dividends to Retained Earnings. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

(To paid the dividend declared on December 1)

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

(To close net income)

                                                          Mar. 1June 22Sept. 1Oct. 1Dec. 1Dec. 31

(To close dividends)

Solutions

Expert Solution

Journalize the transactions for the dates shown. Include entries to close net income and dividends to Retained Earnings. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit
May 1 Cash (6600*90) 594000
Common Stock 66000
Paid-in Capital in Excess of Stated Value —Common Stock 528000
June 22 Treasury Stock (1200*11) 13200
Cash 13200
Sept 1 cash dividend (350000*9%) 31500
Preferred dividend payable 31500
Oct 1 Preferred dividend payable 31500
Cash 31500
Dec 1 Cash dividend (146400*.60) 87840
Common Dividend payable 87840
Dec 31 Common dividend payable 87840
Cash 87840

(To paid the dividend declared on December 1)
Dec 31 Income summary 118000
Retained earnings 118000

(To close net income)
Dec 31 retained earnings 119340
Cash dividend 119340

(To close dividends)

ekkarill92 answered 2 years ago
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