Problem 13-6A Irwin Corporation has been authorized to issue 20,500 shares of $1
ID: 2566615 • Letter: P
Question
Problem 13-6A Irwin Corporation has been authorized to issue 20,500 shares of $100 par value, 10%, preferred assigned a $2.50 stated value to the common stock. At December 31, 2017, the ledger contained the following balances Preferred Stock Pald-in Capital in Excess of Par-Preferred Stock Common Stock stock and 962,500 shares of no-par common stock. The corporation $120,000 23,000 962,500 Paid-in Capital in Excess of Stated Value-Common Stock2,502,500 9,840 1,230 80,000 Treasury Stock (820 common shares) Paid-in Capital from Treasury Stock Retained Earnings The preferred stock was issued for land having a fair value of $143,000. All common stock issued was for cash. In November, 1,230 shares of common stock were at a per share cost of $12. In December, 410 shares of treasury stock were sold for $15 per share. No dividends were declared in 2017Explanation / Answer
JOURNAL
Tr. #
Date
Account
Debit
Credit
1
Land
143000
Preferred Stock
120000
Paid in capital in excess of par- Preferred Stock
23000
2
Cash
3465000
Common Stock
962500
Paid in capital in excess of stated value - Common Stock
2502500
3
Treasury Stock
14760
Cash
14760
4
Cash
6150
Treasury Stock
4920
Paid in capital from Treasury stock
1230
IRWIN CORPORATION
Balance Sheet (Partial)
As on December 31, 2017
Stock holder's Equity
Paid in capital
Capital Stock
Preferred Stock - 20,500 shares of $100 par value authorized and 1,200 shares issued and outstanding
120000
Common Stock - 962,500 shares of $2.50 stated value authorized and 385,000 shares issued and 384,180 shares outstanding
962500
Total capital stock
1082500
Additional Paid in capital
in excess of par - Preferred stock
23000
in excess of stated value - Common stock
2502500
Treasury stock
1230
Total additional paid in capital
2526730
Total paid in capital
3609230
Retained earnings
80000
Total paid in capital and retained earnings
3689230
Less: Treasury stock (820 common shares)
9840
Total stockholder’s equity
3679390
JOURNAL
Tr. #
Date
Account
Debit
Credit
1
Land
143000
Preferred Stock
120000
Paid in capital in excess of par- Preferred Stock
23000
2
Cash
3465000
Common Stock
962500
Paid in capital in excess of stated value - Common Stock
2502500
3
Treasury Stock
14760
Cash
14760
4
Cash
6150
Treasury Stock
4920
Paid in capital from Treasury stock
1230