Question

On December 31, 2021, Oriole Company had 1,365,000 shares of $5 par common stock issued and outstanding. At December 31, 2021, stockholders’ equity had the amounts listed here.

Common Stock		$6,825,000
Additional Paid-in Capital		1,845,000
Retained Earnings		1,105,000

Transactions during 2022 and other information related to stockholders’ equity accounts were as follows.

1.		On January 10, issued at $114 per share 112,000 shares of $101 par value, 7% cumulative preferred stock.
2.		On February 8, reacquired 13,900 shares of its common stock for $15 per share.
3.		On May 9, declared the yearly cash dividend on preferred stock, payable June 10, to stockholders of record on May 31.
4.		On June 8, declared a cash dividend of $1.75 per share on the common stock outstanding, payable on July 10, to stockholders of record on July 1.
5.		Net income for 2022 was $3,606,000.

A.) Record the journal entries that are required for items 1–5 above. (Record entries in the order displayed in the problem statement. 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.)

B.) Prepare the stockholders’ equity section of Orioles' balance sheet at December 31, 2022.

Answer 1

Journal Entry-Oriole Company
Date	Account Tittle	Debit	Credit
10-Jan-20	Cash (112000x $114)	$12,768,000.00
	Preferred stock (112000*101)		$11,312,000.00
	Additional paid-in capital		$1,456,000.00
	(To record issue of preferred stock)
8-Feb-20	Treasury stock (13900 x $15)	$208,500.00
	Cash		$208,500.00
	(To record purchase of treasury stock)
9-May-20	Cash Dividend (112000*101*7%)	$791,840.00
	Dividend payable		$791,840.00
	To Record Dividend Declearation to Preferred
10-Jun-20	Dividend payable	$791,840.00
	Cash		$791,840.00
8-Jun-20	Cash Dividend (1365000-13900)*1.75	$2,364,425.00
	Dividend payable		$2,364,425.00
	To Record Dividend Declearation
10-Jul-20	Dividend payable	$2,364,425.00
	Cash		$2,364,425.00
31-Jul	Retaiend Earning	$3,156,265.00
	Cash Dividend (791840+2364425)		$3,156,265.00
31-Jul	Income Summary	$3,606,000.00
	Retained Earning		$3,606,000.00

Stock holder Equity Section
	Amount	Amount
Stockholders' Equity:
Preferred Stock		$11,312,000.00
Common stock		$6,825,000.00
Additional Paid in capitotal:
Additional paid-in capital(1845000+1456000)		$3,301,000.00
Total Paid in capital		$21,438,000.00
Retained Earning (1105000+3606000-2364425-791840)		$1,554,735.00
Less: Treasury stock		($208,500.00)
Total Stock holder Equity		$22,784,235.00