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Screen shot 2011-09-27 at 9.21.28 AM - trumn ump Len...

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Unformatted text preview: trumn ump- Len; sis-1s (Dividends and Slockholders’ Equity Section} Elizabeth Company reported the following amounts in the stockholders’ equity section of its December 31, 21110, balance sheet. Preferred stock, 5%, 51m par [10.31) shares authorized, 2,000 shares issued]: $200,000 Common stock. 55 per {100,000 shares ammnzad, 20,000 shares issued} 100,000 Additional paid—in capital 125.000 Retained earnings 450,000 Total $015,000 During 2011, Elizabeth took part in the following transactions cementing stockholders" equity. 1. P‘F‘E" F" I-‘aid the annual 2010 $8 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2010. Purchased 2,200 shares of its own outstanding common stod: for $40 per share. Elizabeth uses the cost method. Reissued rm treasury shares for land valued at $30111]. Issued 500 shares of preferred stock at $105 per share. Declared a 10% stock dividend onthe outstanding common stock when the stud: is selling for $45 per share. Issued the stock dividend. Declared the annual 2011 $8 per share dividend on preferred stock and the $2 per share dividend on corrumn stock. These dividends are payable in 2012. Instructions {aJ Prepare journal entries to record the transactions described above. {bl Prepare the Deoember 3-1, 2011, stocfldiolders’ equity section. Assume 2011 netincomewas $330,000. ...
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