Problem 1:
Pringle Corporation has been authorized to issue 23,300 shares of $100 par value, 8%, noncumulative preferred stock and 1,007,600 shares of no-par common stock.
The corporation assigned a $4 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders' equity.
| Preferred Stock |
$165,200 |
| Paid-in Capital in Excess of Par Value-Preferred Stock |
21,230 |
| Common Stock |
2,270,000 |
| Paid-in Capital in Excess of Stated Value-Common Stock |
1,546,000 |
| Treasury Stock- (5,470 common shares) |
49,230 |
| Retained Earnings |
82,900 |
The preferred stock was issued for $186,430 cash. All common stock issued was for cash. In November 5,470 shares of common stock were purchased for the treasury at a per share cost of $9. No dividends were declared in 2014.
Prepare the journal entries for the following.
(1) Issuance of preferred stock for cash.
(2) Issuance of common stock for cash.
(3) Purchase of common treasury stock for cash.
Prepare the stockholders' equity section of the balance sheet at December 31, 2014.
Problem 2:
On January 1, 2014, Everett Corporation had these stockholders' equity accounts.
| Common Stock ($10 par value, 72,800 shares issued and outstanding) |
$728,000 |
| Paid-in Capital in Excess of Par Value |
517,300 |
| Retained Earnings |
659,300 |
During the year, the following transactions occurred.
| Jan. 15 |
Declared a $0.60 cash dividend per share to stockholders of record on January 31, payable February 15. |
| Feb. 15 |
Paid the dividend declared in January. |
| Apr. 15 |
Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share. |
| 15-May |
Issued the shares for the stock dividend. |
| Dec. 1 |
Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2015. |
| Dec. 31 |
Determined that net income for the year was $448,900. |
Journalize the transactions.