Question

In: Accounting

On January 5, 2020, Marin Corporation received a charter granting the right to issue 5,100 shares...

On January 5, 2020, Marin Corporation received a charter granting the right to issue 5,100 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 48,600 shares of $10 par value common stock. It then completed these transactions.

Jan. 11 Issued 19,900 shares of common stock at $16 per share.
Feb. 1 Issued to Sanchez Corp. 4,100 shares of preferred stock for the following assets: equipment with a fair value of $52,500; a factory building with a fair value of $166,000; and land with an appraised value of $252,000.
July 29 Purchased 1,800 shares of common stock at $18 per share. (Use cost method.)
Aug. 10 Sold the 1,800 treasury shares at $15 per share.
Dec. 31 Declared a $0.45 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31

Closed the Income Summary account. There was a $172,200 net income.

1. Record the journal entries for the transactions listed above. (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. Record entries in the order displayed in the problem statement. Round answers to 0 decimal places, e.g. $5,275.)

2. Prepare the stockholders’ equity section of Marin Corporation’s balance sheet as of December 31, 2020. (Enter account name only and do not provide descriptive information.)

Solutions

Expert Solution

Date Account Tittle- Marin Corporation Debit Credit
11-Jan Cash ( 19900Share X $16) 318400
Paid in Capital fro Common stock 119400
Common stock(19900X10) 199000
1-Feb Equipment 52500
Factory Building 166000
Land 252000
Paid in Capital fro Preferred stock 429500
Preferred stock(4100X100) 41000
29-July Treasury stock ( 1800X 18) $32,400.00
Cash $32,400.00
10-Aug Cash (1800*15) 27000
Retained Earning 5400
Treasury stock ( 1800X 18) 32400
10-Dec Retained Earning $37,655.00
Dividend Payable
(19900*0.45)+(4100*100*7%)
$37,655.00
31-Dec Income Summary $172,200.00
Retained Earning $172,200.00
Statement showing stockholder Equity
Common Stock $199,000
Preferred Stock $41,000
Paid in Capital in excess of par - Common Stock $119,400
Paid in Capital in excess of par - Preferred Stock $429,500
Total Paid in Capital $788,900
Retained earnings   (172200-37655-5400) $129,145
Total stock Holder Equity $918,045

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