Problem 11-3A The stockholders\' equity accounts of Skysong. Inc. on January 1,
ID: 2580521 • Letter: P
Question
Problem 11-3A The stockholders' equity accounts of Skysong. Inc. on January 1, 2019, were as follows. Preferred stock (B%.52 par, cumulative, 11,000 shares authorized) Common Stock ($1 stated value, 2,000,000 shares authorized) Paid-in Capital in Excess of Par-Preferred Stoclk Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (10,000 common shares) 390,000 1,000,000 130,000 1,500,000 1,750,000 50,000 During 2019, the corporation had the following transactions and events pertaining to its stockholders' equity Feb. 1 Issued 26,000 shares of common stock for $124,000 Apr. 14 Sold S,600 shares of treasury stock common for 532,400. Sept. 3 Issued 4,800 shares of common stock for a patent valued at 534,000. Nov. 10 Purchased 1,100 shares of common stock for the treasury at a cost of $6,100. Dec. 31 Determined that net income for the year was $435,000 No dividends were declared during the yearExplanation / Answer
Date Account Titles and Explanation Debit Credit Feb. 1 Cash 124000 Common stock (26000 x $1) 26000 Paid-in Capital in Excess of Stated Value-Common Stock 98000 (To record issue of common stock) Apr. 14 Cash 32400 Treasury stock (5600 x $5) 28000 Paid-in Capital from Treasury stock 4400 (To record sale of treasury stock) Sept. 3 Patent 34000 Common stock (4800 x $1) 4800 Paid-in Capital in Excess of Stated Value-Common Stock 29200 (To record shares issued for patent) Nov. 10 Treasury stock 6100 Cash 6100 (To record treasury stock purchased) Dec. 31 Income summary 435000 Retained earnings 435000 (To close net income to retained earnings) Preferred Stock Jan.1 Bal 390000 Dec. 31 Bal 390000 Paid-in Capital in Excess of Par Value-Preferred Stock Jan.1 Bal 130000 Dec. 31 Bal 130000 Common Stock Jan.1 Bal 1000000 Feb. 1 26000 Sept. 3 4800 Dec. 31 Bal 1030800 Paid-in Capital in Excess of Stated Value-Common Stock Jan.1 Bal 1500000 Feb. 1 98000 Sept. 3 29200 Dec. 31 Bal 1627200 Retained Earnings Jan.1 Bal 1750000 Dec. 31 435000 Dec. 31 Bal 2185000 Paid-in Capital from Treasury Stock Apr. 14 4400 Dec. 31 Bal 4400 Treasury Stock Jan.1 Bal 50000 Apr. 14 28000 Nov. 10 6100 Dec. 31 Bal 28100 Skysong, Inc. Balance Sheet (Partial) At December 31, 2019 Stockholders' Equity Paid-in Capital Capital stock Preferred Stock 390000 Common Stock 1030800 Total capital stock 1420800 Additional paid-in capital In excess of par value-Preferred Stock 130000 In excess of stated value-Common Stock 1627200 Treasury Stock 4400 Total additional paid-in capital 1761600 Total paid-in capital 3182400 Retained Earnings 2185000 Total paid-in capital and retained earnings 5367400 Less: Treasury stock -28100 Total Stockholders' equity $ 5339300