Question
In: Accounting
Monty Company reported the following amounts in the stockholders’ equity section of its December 31, 2016,...
Monty 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, 1,800 shares issued) $180,000
Common stock, $5 par (94,000 shares authorized, 18,800 shares issued) 94,000
Additional paid-in capital 131,000 Retained earnings 478,000 Total $883,000
During 2017, Monty 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 1,500 shares of its own outstanding common stock for $43 per share. Monty uses the cost method.
3. Reissued 800 treasury shares for land valued at $36,200.
4. Issued 540 shares of preferred stock at $104 per share.
5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $41 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.
a. Prepare journal entries to record the transactions described above.
b. Prepare the December 31, 2017, stockholders’ equity section. Assume 2017 net income was $347,000.
Solutions
Expert Solution
SOLUTION
1. Journal Entries-
| S.No. | Accounts title and Explanations | Debit ($) | Credit ($) |
| 1. | Dividends Payable- Preferred (1,800 * $10) | 18,000 | |
| Dividends Payable- Common (18,800 * $2) | 37,600 | ||
| Cash | 55,600 | ||
| 2. | Treasury Stock | 64,500 | |
| Cash (1,500 * $43) | 64,500 | ||
| 3. | Land | 36,200 | |
| Treasury Stock (800 * $43) | 34,400 | ||
| Paid-in Capital From Treasury Stock | 1,800 | ||
| 4. | Cash (540 * $104) | 56,160 | |
| Preferred Stock (540 * $100) | 54,000 | ||
| Paid-in Capital in Excess of Par- Preferred | 2,160 | ||
| 5. | Retained Earnings* (1,810 * $41) | 74,210 | |
| Common Stock Dividend Distributable (1,810 * $5) | 9,050 | ||
| Paid-in Capital in Excess of Par - Common | 65,160 | ||
| 6. | Common Stock Dividend Distributable | 9,050 | |
| Common Stock | 9,050 | ||
| 7. | Retained Earnings | 63,220 | |
| Dividends Payable- Preferred [(1,800+540)*$10] | 23,400 | ||
| Dividends Payable- Common [(18,100+1,810)*$2] | 39,820 |
* Retained earnings - 18,800 - 1,500 + 800 = 18,100* 10% = 1,810
ekkarill92 answered 1 year agoRelated Solutions
Monty Company reported the following amounts in the stockholders’ equity section of its December 31, 2016,...
Monty Company reported the following amounts in the
stockholders’ equity section of its December 31, 2016, balance
sheet.
Preferred stock, 9%, $100 par (10,000 shares authorized, 1,800
shares issued)
$180,000
Common stock, $5 par (101,500 shares authorized, 20,300 shares
issued)
101,500
Additional paid-in capital
130,000
Retained earnings
486,000
Total
$897,500
During 2017, Monty took part in the following transactions
concerning stockholders’ equity.
1.
Paid the annual 2016 $9 per share dividend on preferred stock
and a $2 per share dividend...
Monty Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Monty Company reported the following amounts in the
stockholders’ equity section of its December 31, 2019, balance
sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800
shares issued) $180,000
Common stock, $5 par (103,500 shares authorized, 20,700 shares
issued) 103,500
Additional paid-in capital 114,000
Retained earnings 423,000
Total $820,500
During 2020, Monty took part in the following transactions
concerning stockholders’ equity. 1. Paid the annual 2019 $10 per
share dividend on preferred stock and a $2 per share dividend...
Headland Company reported the following amounts in the stockholders’ equity section of its December 31, 2016,...
Headland Company reported the following amounts in the
stockholders’ equity section of its December 31, 2016, balance
sheet. Preferred stock, 9%, $100 par (10,000 shares authorized,
1,800 shares issued) $180,000 Common stock, $5 par (101,500 shares
authorized, 20,300 shares issued) 101,500 Additional paid-in
capital 130,000 Retained earnings 486,000 Total $897,500 During
2017, Headland took part in the following transactions concerning
stockholders’ equity. 1. Paid the annual 2016 $9 per share dividend
on preferred stock and a $2 per share dividend...
Teal Company reported the following amounts in the stockholders’ equity section of its December 31, 2016,...
Teal Company reported the following amounts in the stockholders’
equity section of its December 31, 2016, balance sheet.
Preferred stock, 9%, $100 par (10,000 shares authorized, 2,100
shares issued) $210,000
Common stock, $5 par (99,000 shares authorized, 19,800 shares
issued) 99,000
Additional paid-in capital 137,000
Retained earnings 410,000
Total $856,000
During 2017, Teal took part in the following transactions
concerning stockholders’ equity.
1. Paid the annual 2016 $9 per share dividend on preferred stock
and a $2 per share dividend...
Woods Company reported the following amounts in the stockholders’ equity section of its December 31, 2016,...
Woods Company reported the following amounts in the
stockholders’ equity section of its December 31, 2016, balance
sheet.
Preferred stock, 10%, $50 par value
(10,000 shares authorized, 4,000 shares
issued)
$ 200,000
Common stock, $5 par value
(100,000 shares authorized, 20,000 shares
issued)
100,000
Paid-in Capital in Excess of Par – Preferred Stock
20,000
Paid-in Capital in Excess of Par – Common Stock
360,000
Total paid-in
capital
680,000
Retained
earnings
450,000
Total stockholders'
equity
$1,130,000
During 2017,...
Kingbird Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Kingbird Company reported the following amounts in the
stockholders’ equity section of its December 31, 2019, balance
sheet.
Preferred stock, 9%, $100 par (10,000 shares authorized, 1,800
shares issued)
$180,000
Common stock, $5 par (92,000 shares authorized, 18,400 shares
issued)
92,000
Additional paid-in capital
112,000
Retained earnings
462,000
Total
$846,000
During 2020, Kingbird took part in the following transactions
concerning stockholders’ equity.
1.
Paid the annual 2019 $9 per share dividend on preferred stock
and a $2 per share dividend...
Headland Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Headland Company reported the following amounts in the
stockholders’ equity section of its December 31, 2019, balance
sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 1,900
shares issued)
$190,000
Common stock, $5 par (101,000 shares authorized, 20,200 shares
issued)
101,000
Additional paid-in capital
125,000
Retained earnings
431,000
Total
$847,000
During 2020, Headland took part in the following transactions
concerning stockholders’ equity.
1.
Paid the annual 2019 $10 per share dividend on preferred stock
and a $2 per share dividend...
Ivanhoe Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Ivanhoe Company reported the following amounts in the
stockholders’ equity section of its December 31, 2019, balance
sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 2,100
shares issued)
$210,000
Common stock, $5 par (92,500 shares authorized, 18,500 shares
issued)
92,500
Additional paid-in capital
132,000
Retained earnings
434,000
Total
$868,500
During 2020, Ivanhoe took part in the following transactions
concerning stockholders’ equity.
1.
Paid the annual 2019 $10 per share dividend on preferred stock
and a $2 per share dividend...
Sheridan Company reported the following amounts in the stockholders’ equity section of its December 31, 2019,...
Sheridan Company reported the following amounts in the
stockholders’ equity section of its December 31, 2019, balance
sheet.
Preferred stock, 9%, $100 par (10,000 shares authorized, 1,900
shares issued)
$190,000
Common stock, $5 par (98,000 shares authorized, 19,600 shares
issued)
98,000
Additional paid-in capital
117,000
Retained earnings
470,000
Total
$875,000
During 2020, Sheridan took part in the following transactions
concerning stockholders’ equity.
1.
Paid the annual 2019 $9 per share dividend on preferred stock
and a $2 per share dividend...
Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31,...
Anne Cleves 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 (100,000 shares authorized, 20,000 shares
issued) 100,000
Additional paid-in capital . 125,000
Retained earnings 450,000
Total . $875,000
During 2017, Cleves took part in the following transactions
concerning stockholders’ equity.
1. Paid the annual 2016 $10 per share dividend on preferred
stock and a $2...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain how biology, culture, and their interaction shape sex differences.
- Write a program that computes the tax and tip on a restaurant bill for a patron...
- clear all close all % %*******Parameter Settings******** %********************************* Fs=8192; %Sampling frequency (MATLAB's default) Ts=1/Fs; %Sampling time...
- Name a business that you believe has experienced declining costs attributable to computerization. Were variable costs...
- With C++, 1. Assume we use two linked lists that represent Set A and Set B...
- A beam of light shines on an equilateral glass prism at an angle of 45∘ to...
- This is an intro to python question. #Write a function called search_for_string() that takes two #parameters,...
ADVERTISEMENT