The following selected accounts appear in the ledger of EJ Construction Inc. at
ID: 2500926 • Letter: T
Question
The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal year:
During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
Preferred 1% Stock, $50 par (100,000 shares authorized, 79,500 shares issued) $3,975,000 Paid-In Capital in Excess of Par—Preferred Stock 151,050 Common Stock, $3 par (5,000,000 shares authorized, 2,460,000 shares issued) 7,380,000 Paid-In Capital in Excess of Par—Common Stock 1,722,000 Retained Earnings 34,910,000Explanation / Answer
Working for Dividend
Issued 521,500 shares of common stock at $9, receiving cash. Dr Cr Cash ( 521500 x 9) 4693500 Common Stock (521500 x 3 ) 1564500 Paid-In Capital in Excess of Par—Common Stock 3129000 Issued 9,100 shares of preferred 1% stock at $59. Dr Cr Cash ( 9100 x 59) 536900 Preferred Stock( 92100 x 50) 455000 Paid-In Capital in Excess of Par—Preferred Stock 81900 Purchased 51,600 shares of treasury common for $6 per share. Dr Cr Treasury Stock (( 51600 x 6 ) 309600 Cash ( 51600 x 6 ) 309600 Sold 18,700 shares of treasury common for $8 per share. Dr Cr Cash ( 18700 x 8 ) 149600 Treasury Stock (( 18700 x 6 ) 112200 Paid-In Capital from Treasury Stock 37400 Sold 4800 shares of treasury common for $5 per share. Dr Cr Cash (4800 x 5 ) 24000 Paid-In Capital from Treasury Stock (loss) 3000 Treasury Stock (( 4500 x 6 ) 27000 Declared cash dividends of $0.50 per share on preferred stock and $0.06 per share on common stock. Dr Cr Retained Earnings 2393890 Dividiends payable 2393890 Paid the cash dividends. Dr Cr Dividiends payable 2393890 Cash 2393890