Problem 11-3A The stockholders\' equity accounts of Windsor, Inc. on January 1,
ID: 2580670 • Letter: P
Question
Problem 11-3A The stockholders' equity accounts of Windsor, Inc. on January 1, 2019, were as follows. Preferred Stock (8%, $52 par, cumulative, 10,000 shares authorized) Common Stock ($1 stated value, 2,050,000 shares authorized) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (10,000 common shares) $ 390,000 1,100,000 135,000 1,400,000 1,750,000 50,000 During 2019, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 24,500 shares of common stock for $125,000. Apr. 14 Sold 5,900 shares of treasury stock-common for $32,300. Sept. 3 Issued 4,900 shares of common stock for a patent valued at $34,300 Nov. 10 Purchased 1,100 shares of common stock for the treasury at a cost of $5,900 Dec. 31 Determined that net income for the year was $500,000 No dividends were declared during the yearExplanation / Answer
Date Account Titles and Explanation Debit Credit Feb. 1 Cash 125000 Common stock (24500 x $1) 24500 Paid-in Capital in Excess of Stated Value-Common Stock 100500 (To record issue of common stock) Apr. 14 Cash 32300 Treasury stock (5900 x $5) 29500 Paid-in Capital from Treasury stock 2800 (To record sale of treasury stock) Sept. 3 Patent 34300 Common stock (4900 x $1) 4900 Paid-in Capital in Excess of Stated Value-Common Stock 29400 (To record shares issued for patent) Nov. 10 Treasury stock 5900 Cash 5900 (To record treasury stock purchased) Dec. 31 Income summary 500000 Retained earnings 500000 (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 135000 Dec. 31 Bal 135000 Common Stock Jan.1 Bal 1100000 Feb. 1 24500 Sept. 3 4900 Dec. 31 Bal 1129400 Paid-in Capital in Excess of Stated Value-Common Stock Jan.1 Bal 1400000 Feb. 1 100500 Sept. 3 29400 Dec. 31 Bal 1529900 Retained Earnings Jan.1 Bal 1750000 Dec. 31 500000 Dec. 31 Bal 2250000 Paid-in Capital from Treasury Stock Apr. 14 2800 Dec. 31 Bal 2800 Treasury Stock Jan.1 Bal 50000 Apr. 14 29500 Nov. 10 5900 Dec. 31 Bal 26400 Windsor, Inc. Balance Sheet (Partial) At December 31, 2019 Stockholders' Equity Paid-in Capital Capital stock Preferred Stock 390000 Common Stock 1129400 Total capital stock 1519400 Additional paid-in capital In excess of par value-Preferred Stock 135000 In excess of stated value-Common Stock 1529900 Treasury Stock 2800 Total additional paid-in capital 1667700 Total paid-in capital 3187100 Retained Earnings 2250000 Total paid-in capital and retained earnings 5437100 Less: Treasury stock -26400 Total Stockholders' equity $ 5410700