Question

Part A Directions: Prepare journal entries for the following 2017 equity account related transactions. Feb 1 Issued 10,000 shares of $5 par value common stock at $30 cash per share. Jul 1 Issued 10,000 shares of $25 par value preferred stock at $120 cash per share Aug 1 Purchased back 3,000 shares of common stock at $31 cash per share. Oct 1 Resold 1,200 shares of treasury stock at $32 cash per share. Nov 1 Issued 2000 shares of common stock in exchange for equipment valued at $25,000.

Part B Directions:  Complete the equity section of the 2017 Balance Sheet.  There are 100,000 preferred shares authorized
and 100,000 common share authorized.  Ending Retained Earnings = $295,000.
	Balance Sheet - Stockholder's section
	Paid-in Capital:
	Preferred Stock, $25 par, 100,000 shares authorized, 10,000 shares issued
	and outstanding
	Common Stock, $5 par, 100,000 shares authoirzed, 7000 shares issues with
	1800 shares in Treasury
	Additional Paid-in Capital:
	Paid in capital in excess of par, Preferred Stock
	Paid in capital in excess of par, Common Stock
	Paid in capital in excess of par, Treasury Stock
	Retained Earnings
	Less:  Treasury Stock
	Total Stockholder's Equity

Answer 1

Journal entries for the following 2017 equity account related transactions is as follows:

Date	Particulars	L.F	Amount ($)	Amount ($)
Feb-01	Cash (10,000*30)		300,000
	Common Stock (10,000*5)			50,000
	Additional paid-in capital-common stock			250,000
	(For shares issued)
Jul-01	Cash (10,000*120)		1,200,000
	Preferred Stock (10,000*25)			250,000
	Additional paid in capital-preferred stock			950,000
	(For preferred stock issued)
Aug-01	Treasury Stock (3,000*31)		93,000
	Cash			93,000
	(For treasury shares issued)
Oct-01	Cash (1,200*32)		38,400
	Treasury Stock (1,200*31)			37,200
	Additional paid-in capital-treasury stock			1,200
	(For treasury stock resold)
Nov-01	Equipment		25,000
	Common Stock (2,000*5)			10,000
	Additional paid-in capital-common stock			15,000
	(For shares issued)

Equity section is as calculated below:

Balance Sheet - Stockholder's section
Paid-in Capital:
Preferred Stock, $25 par, 100,000 shares authorized, 10,000 shares issued	250,000
and outstanding
Common Stock, $5 par, 100,000 shares authorized, 7000 shares issues with	60,000
1800 shares in Treasury		310,000
Additional Paid-in Capital:
Paid in capital in excess of par, Preferred Stock	950,000
Paid in capital in excess of par, Common Stock	265,000
Paid in capital in excess of par, Treasury Stock	1,200	1,216,200
Retained Earnings	295,000
Less:  Treasury Stock	55,800	350,800
Total Stockholder's Equity		1,877,000