Question

National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders’ equity during 2021, National League’s first year of operations:

February	2		Issue 1.5 million shares of common stock for $35 per share.
February	4		Issue 600,000 shares of preferred stock for $23 per share.
June	15		Purchase 150,000 shares of its own common stock for $30 per share.
August	15		Resell 112,500 shares of treasury stock for $45 per share.
November	1		Declare a cash dividend on its common stock of $1.50 per share and a $480,000 (4% of par value) cash dividend on its preferred stock payable to all stockholders of record on November 15. (Hint: Dividends are not paid on treasury stock.)
November	30		Pay the dividends declared on November 1.

Answer 1