Question

Problem 15-1

On January 5, 2017, Crane Corporation received a charter granting the right to issue 5,400 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 46,800 shares of $10 par value common stock. It then completed these transactions.

Jan. 11		Issued 19,700 shares of common stock at $16 per share.
Feb. 1		Issued to Sanchez Corp. 3,800 shares of preferred stock for the following assets: equipment with a fair value of $46,000; a factory building with a fair value of $160,000; and land with an appraised value of $247,000.
July 29		Purchased 1,700 shares of common stock at $16 per share. (Use cost method.)
Aug. 10		Sold the 1,700 treasury shares at $15 per share.
Dec. 31		Declared a $0.40 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31		Closed the Income Summary account. There was a $168,200 net income.

Prepare the stockholders’ equity section of Crane Corporation’s balance sheet as of December 31, 2017. (Enter account name only and do not provide descriptive information.)

Answer 1

Stockholder's equity section of Crane corporation
	Particulars				Amount	Amount
	Capital stock
	Preferred stock @100				380000
	Common stock 19700@10				197000
	total capital stock					577000
	Additional paid in capital
	paid in capital : preferred				73000
	paid in capital : common				118200	191200
	Total paid in capital					768200
	Add: Retained earning (168200-1700-34480)					131820
	total stockholder's equity					900020
	Journal entries
Date	Particulars				Debit	Credit
11-Jan	cash (19700*16)				315200
	common stock (19700*10)					197000
	paid in capital excess					118200
	( to record issue common share)
01-Feb	equipment				46000
	building				160000
	land				247000
	preferred stock (3800*100)					380000
	paid in capital excess					73000
	( to record issue prefferred share for land etc)
29-Jul	treasury stock (1700*16)				27200
	cash					27200
	( to record treasury stock purchase)
10-Aug	Cash (1700*15)				25500
	retained earning (1700*1)				1700
	to treasury stock (1700*16)					27200
31-Dec	Retained earning				34480
	common stock dividend (19700*0.40)					7880
	preferred stock dividend (3800*100*7%)					26600
	( to record dividend payable)
31-Dec	Income summary				168200
	retained earning					168200
	( to record income summary)