Question

MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock $570,000 Common stock 110,000 Additional paid in capital 7,401,500 Total paid-in capital 8,081,500 Retained earnings Treasury stock Total stockholders' equity $8,081,500
	Date General Journal Debit Credit December 01, 2018 Dividends Dividends payable

Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2018, its first year of operations: January 2 Issue 110,000 shares of common stock for $67 per share. February 14 Issue 57,000 shares of preferred stock for $12 per share. May 8 Repurchase 11,000 shares of its own common stock for $57 per share. May 31 Reissue 5,500 shares of treasury stock for $62 per share. December 1 Declare a cash dividend on its common stock of $0.40 per share and a $34,200 (6% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.) December 30 Pay the cash dividends declared on December 1.

Answer 1

Date	General Journal	Debit	Credit
2 Jan. 2018	Cash	$7,370,000
	Common Stock		$110,000
	Additional paid in capital		$7,260,000
14 Feb	Cash	$684,000
	Preferred Stock		$570,000
	Additional Paid in Capital		$114,000
8 May	Treasury stock	$627,000
	Cash		$627,000
31 May	Cash	$341,000
	Treasury stock		$313,500
	Additional paid in capital		$27,500
1 Dec.	Dividiends	$76,000
	Dividends Payable		$76,000
15 Dec.	No Journal entry required
30 Dec.	Dividends Payable	$76,000
	Cash		$76,000

MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018
Stockholders' Equity :
Preferred stock	$570,000
Common stock	$110,000
Additional Paid in Capital	$7,401,500
Total Paid in Capital	$8,081,500
Retained Earnings	$313,500
Treasury Stock	-$313,500
Total Stockholders' equity	$8,081,500