Stockholders’ Equity: Transactions and Balance Sheet Presentation The stockholde
ID: 2793784 • Letter: S
Question
Stockholders’ Equity: Transactions and Balance Sheet Presentation
The stockholders’ equity accounts of Windham Corporation at January 1 appear below:
During the year, the following transactions occurred:
Required
a. Set up T-accounts for the stockholders’ equity accounts as of the beginning of the year and enter the January 1 balances.
c. Prepare the December 31 stockholders’ equity section of the balance sheet.
8 Percent preferred stock, $25 par value, 50,000 shares authorized; 6,800 shares issued and outstanding $170,000 Common stock, $10 par value, 200,000 shares authorized; 50,000 shares issued and outstanding 500,000 Paid-in capital in excess of par value-Preferred stock 68,000 Paid-in capital in excess of par value-Common stock 200,000 Retained earnings 270,000 Cash Jan.10 Jan.23 Mar.14 Nov.15 Bal Preferred Stock Beg. Jul.15 Bal Common Stockk Beg. Jan.10 Bal Equipment Jul.15 0 Bal 0Explanation / Answer
Requirement c:
Requirement b: General Journal: Date Description Debit Credit Jan-10 Cash 504000 To Common Stock 280000 To Paid in capital in excess par - Common Stock 224000 [Issued Common Stock] Jan-23 Treasury Stock - Common Stock 160000 To Cash 160000 [Purchased Treasury Stock] Mar-14 Cash 88000 To Treasury Stock - Common Stock 80000 To Paid in capital from Treasury Stock 8000 [Sold Treasury Stock] Jul-15 Equipment 128000 To Preferred Stock 80000 To Paid in capital in excess of par value - preferred stock 48000 [Issued preferred stock for equipment] Nov-15 Cash 25000 To Treasury Stock - Common Stock 20000 To Paid in capital from Treasury Stock 5000 [To record sale of treasury stock]