Question

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current fiscal year:

Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued)	$3,755,000
Paid-In Capital in Excess of Par—Preferred Stock	165,220
Common Stock, $3 par (5,000,000 shares authorized, 1,690,000 shares issued)	5,070,000
Paid-In Capital in Excess of Par—Common Stock	1,014,000
Retained Earnings	30,836,000

During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:

Jan.	5	Issued 454,700 shares of common stock at $8, receiving cash.
Feb.	10	Issued 11,800 shares of preferred 1% stock at $61.
Mar.	19	Purchased 46,500 shares of treasury stock for $8 per share.
May	16	Sold 20,700 shares of treasury stock for $10 per share.
Aug.	25	Sold 5,700 shares of treasury stock for $7 per share.
Dec.	6	Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock.
	31	Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

CHART OF ACCOUNTS

Parks Construction Inc.

General Ledger

ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary

Answer 1

Journal Entry- Parks Construction inc.	Accounting Equation
Date	Accoutn Tittle	Debit	Credit	Asset	Liability	Equity
5-Jan	Cash (454700*8)	$3,637,600.00		$3,637,600.00
	CommonS tock (454700*3)		$1,364,100.00			$1,364,100.00
	Paid in Capital in Excess of Par - Common Stock		$2,273,500.00			$2,273,500.00
10-Feb	Cash (11800*61)	$719,800.00		$719,800.00
	Preferred Stock (11800*50)		$590,000.00			$590,000.00
	Paid in Capitotal in Excess of Par - Preferred Stock		$129,800.00			$129,800.00
19-Mar	treasury Stock (46500*8)	$372,000.00		-$372,000.00		-$372,000.00
	Cash		$372,000.00
16-May	Cash ( 20700*10)	$207,000.00		$207,000.00
	Treasury Stock ( 20700*8)		$165,600.00			$165,600.00
	Paid in Capitotal in Excess of Par - Treasury   Stock		$41,400.00			$41,400.00
25-Aug	Cash ( 5700*7)	$39,900.00		$39,900.00
	Paid in Capitotal in Excess of Par - Treasury   Stock	$5,700.00				-$5,700.00
	Treasury Stock ( 5700*8)		$45,600.00			$45,600.00
6-Dec	Retained Earning	$255,910.00				-$255,910.00
	Dividend Payable- CommonS tock (1690000+454700-46500+20700+5700)*0.10		$212,460.00		$212,460.00
	Dividend Payable - Prefered Stock (75100+11800)*0.50		$43,450.00		$43,450.00
31-Dec	Dividend Payable to preferred Stock	$43,450.00			-$43,450.00
	Dividend Payable to Common Stock	$212,460.00			-$212,460.00
	Cash		$255,910.00	-$255,910.00