Stockholders\' Equity Transactions Squires Inc. was org 1096, $200 par value pre
ID: 2422146 • Letter: S
Question
Stockholders' Equity Transactions Squires Inc. was org 1096, $200 par value preferred, years of the company's existence, the following selected transactions took placering the first two 2014 anized on January 2, 2014, with authorized capital stock consisting of 40,000 shares of and 300,000 shares of no-par, no stated value common. During the first two Jan. 2Sold 15,000 shares of common stock at $14. 2 Sold 4,000 shares of preferred stock at $211 2 Sold common stock as follows: 11,300 shares at $19,3,900 shares at $24. Mar. es of preferred stock and nce being July Acquired a nearby piece of land, appraised at $500,000, for 800 shares of prefen 10 34,000 shares of common. (Preferred stock was recorded at $211, the balance assigned to common.) Dec. Declared the regular preferred dividend and a $1.75 common dividend. 16 28 Paid dividends declared on December 16. Assume that revenues and expenses were closed to a temporary acc Summary. The income summary account showed a credit balance of 00,000 transferred to Retained Earnings. account, ce of $600,000, which was ncome 31 2015 Reacquired 11,000 shares of common stock at $18. The treasury stock is carried at c law requires that an appropriation of Retained Earnings be made for the purchase price treasury stock. Appropriations are to be returned to Retained Earnings upon resale of ost.(State ase price of Feb. 27 the stock.) June 17 Resold 8,000 shares of the treasury stock at $21. uly 31 Resoldallof the remaining treasury stock at $6 Resold all of the remaining treasury stock at $16. uly 31 ept. 30 Sold 17,000 additional shares of common stock at $22 ec. 16 Declared the regular preferred dividend and a $0.70 common dividend 28 Dividends declared on December 16 were paid 31 The income summary account showed a credit balance of $550,000, which was transfe to Retained Earnings.Explanation / Answer
Jouranl entries
To coomon stock
(11,300*19)
To Dividend paayble
(200@10% *4800 = 96,000 preferred
common 64,200*1.75)=112,350
Stockholder's Equity
Preferred stock 800,000
Paid in excess of par 44,000 $844,000
Common stock 81,200 1,073,500
Treasury stock 11,000 198,000
Total paid in captila 2,115,500
Add:Retained Earnings 806,810
Total Stockholder's Equity $2,922,310
Date Description Debit Credit 2014 jan 2 Cash 60,000 To Common Stock(15,000*4) $60,000 Jan 2 Cash 844,000 To Preferred Stock 800,000 To Paid in excess of par (4000*211) 44,000 Marc 2 Cash 214,700To coomon stock
(11,300*19)
214,700 Cash 93,600 To Common Stock (3900*24) 93,600 July 10 Land $500,000 To Preferred stock (800*200) 160,000 To Paid in excess of par - PF 8,800 To Common Stock 331,200 Dec 16 Dividend 208,350To Dividend paayble
(200@10% *4800 = 96,000 preferred
common 64,200*1.75)=112,350
$208,350 Dec 28 Dividend payable $208,350 To Cash $208,350 Dec 31 Income summary 600,000 To Retained earnings 600,000 2015 Feb 27 Treasury Stock 198,000 To Cash(11,000*18) 198,000 June 17 Cash $168,000 To Treasury stock 144,000 To Retained earnings 24,000 Juky 31 Cash 48,000 Retained earnings 6,000 To Treasury stock - common 54,000 Sept 30 Cash $374,000 To Common Stock $374,000 Dec 16 Dividend 96,000 to Divdiend payable - Preferred 96,000 Dividend common stock 56,840 To Dividend payable 56,840