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Exercise 15-18 (Part Level Submission) Wildhorse Company reported the following amounts in the stockholders’ equity section...

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

Solutions

Expert Solution

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

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