Question

Exercise 15-18 (Part Level Submission)

Wildhorse Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet.

Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued)		$200,000
Common stock, $5 par (102,000 shares authorized, 20,400 shares issued)		102,000
Additional paid-in capital		134,000
Retained earnings		480,000
Total		$916,000

During 2017, Wildhorse took part in the following transactions concerning stockholders’ equity.

1.		Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016.
2.		Purchased 1,800 shares of its own outstanding common stock for $41 per share. Wildhorse uses the cost method.
3.		Reissued 700 treasury shares for land valued at $30,200.
4.		Issued 530 shares of preferred stock at $106 per share.
5.		Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $48 per share.
6.		Issued the stock dividend.
7.		Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018. please show your work so i can understand the process

Answer 1

Trans	Accounts title	Dr	Cr
1	Dividend payable-Common (20400*2)	40800
	Dividend payable- Preferred (2000*10)	$20,000
	Cash		$60,800
2	Treasury Stock	73800
	Cash (1800*41)		73800
3	Cash	$30,200
	Paid in capital in excess-Treasury stock/Additional paid in capital		$1,500
	Treasury Stock (700*41)		28700
4	Cash (530*106)	56180
	Preferred Stock		53000
	Additional paid in capital		3180
5	Stock Dividend (20400-1800+700)*10%*48	92640
	Stock Dividend Distributable		92640
6	Stock Dividend Distributable (20400-1100)*10%*48	92640
	Common Stock (20400-1100)*10%*5		9650
	Additional paid in capital		82990
7	Cash dividend	67760
	Dividend payable-Common (20400-1800+700+1930)*2		42460
	Dividend payable- Preferred (2530*10)		25300
	Stockholder equity
	Preferred stock, 10%, $100 par (10,000 shares authorized, 2,530 shares issued)		$25,300
	Common stock, $5 par (102,000 shares authorized, 22330 shares issued 21230 outstanding)		111,650
	Additional paid-in capital (134000+1500+3180+82990)		221,670
	Retained earnings (480000-67760-92740)		319600
	Less : Treasury stock (1100*41)		-45100
	Total Stockholder equity		$633,120