Problem 11-2A (Part Level Submission) The stockholders\' equity accounts of Flin
ID: 2589865 • Letter: P
Question
Problem 11-2A (Part Level Submission) The stockholders' equity accounts of Flint Corporation on January 1, 2017, were as follows. Preferred Stock (896, $100 par noncumulative, 5,000 shares authorized) Common Stock ($4 stated value, 300,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock $300,000 1,000,000 15,000 480,000 686,500 40,000 Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (5,000 common shares) During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 5,000 shares of common stock for $30,000. Mar. 20 Purchased 1,000 additional shares of common treasury stock at $7 per share. Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.60 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017 Dec. 31 Determined that net income for the year was $276,100. Paid the dividend declared on December 1.Explanation / Answer
PREFERRED STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
300,000
Closing Balance
300,000
300,000
300,000
COMMON STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
1,000,000
Feb. 1, 2017
Cash A/c
20,000
Closing Balance
1,020,000
(5000 shares * $4)
10,20,000
10,20,000
PAID IN CAPITAL IN EXCESS OF PAR VALUE – PREFERRED STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
15,000
Closing Balance
15,000
15,000
15,000
PAID IN CAPITAL IN EXCESS OF STATED VALUE – COMMON STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
480,000
Feb. 1, 2017
Cash A/c
10,000
Closing Balance
4,90,000
(5000 shares * $2)
4,90,000
4,90,000
RETAINED EARNINGS
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
686,500
Closing Balance
944,600
Dec. 31
Net Income A/c
(276100 – Dividend 18000)
258,100
944,600
944,600
CASH DIVIDEND
Date
Particulars
Debit
Date
Particulars
Credit
Oct. 1
To Dividend Payable
(5000 * $100 * 8%)
40,000
Dec. 1
To Dividend Payable
(30000 * $0.60)
18,000
Dec. 31
Net Income A/c
58,000
58,000
58,000
TREASURY STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
40,000
Mar. 20
To Cash A/c
(1000 * $7)
7,000
Closing Balance
47,000
47,000
47,000
PREFERRED STOCK
Date
Particulars
Debit
Date
Particulars
Credit
Beginning Balance
300,000
Closing Balance
300,000
300,000
300,000