Can someone please help me to understand this? The stockholders\' equity account
ID: 2389256 • Letter: C
Question
Can someone please help me to understand this?The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,400 shares authorized) $324,000
Common Stock ($5 stated value, 303,000 shares authorized) 1,090,000
Paid-in Capital in Excess of Par Value - Preferred Stock 18,570
Paid-in Capital in Excess of Stated Value - Common Stock 482,820
Retained Earnings 692,430
Treasury Stock - Common (5,400 shares) 43,200
During 2010 the corporation had these transactions and events pertaining to its stockholders' equity.
Feb. 1 Issued 5,400 shares of common stock for $32,400.
Mar. 20 Purchased 1,130 additional shares of common treasury stock at $10 per share.
Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1.
Nov. 1 Paid the dividend declared on October 1.
Dec. 1 Declared a $0.80 per share cash dividend to common stockholders of record on December 15, payable December 31, 2010.
Dec. 31 Determined that net income for the year was $281,483. Paid the dividend declared on December 1.
Journalize the transactions. (Include entries to close net income to Retained Earnings. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Explanation / Answer
2/1 DR Cash 32,400 CR Common Stock 27,000 CR Paid in Capital in excess of stated value 5,400 3/20 DR Treasury stock 11,300 CR Cash 11,300 10/1 DR Dividends 43,200 CR Dividends Payable 43,200 11/1 DR Dividends Payable 43,200 CR Cash 43,200 12/1 DR Dividends 169,176 CR Dividends Payable 169,176 12/31 DR Dividends Payable 169,176 CR Cash 169,176 12/31 DR Income Clearing 281,483 CR Retained earnings 281,483