Chpt 13 PP-1: Top Tech, Inc. Stockholders\' Equity Section at the end of last ye
ID: 2483513 • Letter: C
Question
Chpt 13 PP-1: Top Tech, Inc. Stockholders' Equity Section at the end of last year was as follows: Paid In capital: Preferred Stock, 300,000 Shs. Authorized, 100,000 Outstanding, $1 Par, 8% dividend rate 100,000 Common Stock, 60,000 Shs. Issued and Outstanding, No Par 2,200,000 Total Paid in Capital 2,300,000 Retained Earnings 554,300 Total Stockholders' Equity 2,854,300 Req. #1, give general journal entries for the following transactions that took place this year: 1 Bought back 700 shs of the common stock that were outstanding. Paid $60/Sh. 2 Sold 200 of the shares bought back in prior transaction. Received $57/Sh. 3 Sold 4,000 shares of Pfd. Stock for $5/Sh. 4 Give 3rd closing enrty with the corp. earning 82,000 for the year. Req. #2 prepare Top Tech, Inc. Stockholders' Equity Section at the end of this year.
Explanation / Answer
Common stock accout debit 42,000
To cash 42,000
( for 700 shares bought back at $60 each)
Cash account debit 11,400
To common stock 11,400
( Sold 200 shares at $ 57 per share)
Cash account debit 20,000
To Preferred stock account 20,000
( Sold 4000 prefrred stock at $5 per share)
Profit and loss account debit 82,000
To retained earnings 82,000
Old Addition/(subtraction) New Preferred stock 100,000 20,000 120,000 Common stock 2,200,000 (30,600) 2,169,400 Total paid in capital 2,300,000 2,289,400 Retained earnings 554,300 82,000 636,300 Total shareholder's equity 2,854,300 2,925,700