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ACC 423 Week 2 Team Assignments

ACC 423 Week 2 Team Assignments - Name/Team Problem...

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Name/Team: Problem: P15-1 (Equity Transactions and Statement Preparation) Course: ACC 423-Intermediate Accoumting III Date: On January 5, 2007, Drabek Corporation received a charter granting the right to issue 5,000 shares of $100 p nonparticipating preferred stock, and 50,000 shares of $5 par value common stock. It then completed these tr Jan. 11- Issued 20,000 shares of common stock at $16 per share. Feb. 1- Issued to Rob Nen Corp. 4,000 shares of preferred stock for the following assets: machinery with a a factory building with a fair market value of $110,000; and land with an appraised value of $270 July 29- Purchased 1,800 shares of common stock at $19 per share. (Use cost method.) Aug. 10- Sold the 1,800 treasury shares at $14 per share. Dec. 31- Declared a $0.25 per share cash dividend on the common stock and declared the preferred divide Dec. 31- Closed the Income Summary account. There was a $175,700 net income. a) Record the journal entries for the transactions listed above. Jan. 11, 07 Cash 320,000 Common Stock 100,0 Paid-in Capital in Excess of Par-Common 220 Feb. 1, 07 Machinery 50,000 Factory 110,000 Land 270,000 Preferred Stock (4,000 × $100) 400,0 Paid-in Capital in Excess of Par-Preferred 30 July 29, 07 Treasury Stock 34,200 Cash 34,2 Aug. 10, 07 Cash 25,000 Retained Earnings* 9,000 Treasury Stock 34,2 *(Retained Earnings is debited because there was no Paid-in Capital from Treasury Stock.) Dec. 31, 07 Retained Earnings 37,000 Cash Dividend Payable-Common 5 Cash Dividend Payable-Preferred 32 Dec. 31, 07 Income Summary 175,700 Retained Earnings 175 b) Prepare the stockholders' equity section of Drabek Corporation's balance sheet as of December 31, 2007.
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Drabek Corporation Stockholders' Equity Section December 31, 2007 Preferred stock-par value $100 per share, 8% cumulative and nonparticipating, 5,000 shares authorized, 4,000 shares issued and outstanding Paid-in capital in excess of par-preferred
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