Question

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current fiscal year: Preferred 1% Stock, $50 par (100,000 shares authorized, 79,400 shares issued) $3,970,000 Paid-In Capital in Excess of Par—Preferred Stock 150,860 Common Stock, $3 par (5,000,000 shares authorized, 2,100,000 shares issued) 6,300,000 Paid-In Capital in Excess of Par—Common Stock 1,260,000 Retained Earnings 33,959,000 During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows: Jan. 5 Issued 518,800 shares of common stock at $7, receiving cash. Feb. 10 Issued 9,800 shares of preferred 1% stock at $61. Mar. 19 Purchased 48,300 shares of treasury stock for $7 per share. May 16 Sold 19,500 shares of treasury stock for $9 per share. Aug. 25 Sold 5,000 shares of treasury stock for $6 per share. Dec. 6 Declared cash dividends of $0.50 per share on preferred stock and $0.08 per share on common stock. 31 Paid the cash dividends. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Jan 5	Cash	3631600		=518800*7
	Common Stock		1556400	=518800*3
	Paid-In Capital in Excess of Par-Common Stock		2075200
Feb 10	Cash	597800		=9800*61
	Preferred Stock		490000	=9800*50
	Paid-In Capital in Excess of Par-Preferred Stock		107800
Mar 19	Treasury Stock	338100		=48300*7
	Cash		338100
May 16	Cash	175500		=19500*9
	Treasury Stock		136500	=19500*7
	Paid-In Capital from Sale of Treasury Stock		39000
Aug 25	Cash	30000		=5000*6
	Paid-In Capital from Sale of Treasury Stock	5000
	Treasury Stock		35000	=5000*7
Dec 6	Cash Dividends	252200
	Cash Dividends Payable		252200
Dec 31	Cash Dividends Payable	252200
	Cash		252200
	Workings:
	Dividends on Preferred Stock	44600		=(79400+9800)*0.5
	Dividends on COmmon Stock	207600		=(2100000+518800-48300+19500+5000)*0.08
	Total dividends	252200