WK 2 LT Assignment upload - (Equity Transactions and...

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(Equity Transactions and Statement Preparation) On January 5, 2007, Drabek Corporation received a charter granting the right to issue 5,000 shares of $100 par value , 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $5 par value common stock. It then completed these transactions. 11-Jan Issued 20,000 shares of common stock at $16 per share. 1-Feb Issued to Robb Nen Corp. 4,000 shares of preferred stock for the following assets: machinery with a fair market value of $50,000; a factory building with a fair market value of $110,000; and land with an appraised value of $270,000. 29-Jul Purchased 1,800 shares of common stock at $19 per share. (Use cost method.) 10-Aug Sold the 1,800 treasury shares at $14 per share. 31-Dec Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. 31-Dec Closed the Income Summary account. There was a $175,700 net income. Instructions (A) Record the journal entries for the transactions listed above. (B) Prepare the stockholders’ equity section of Drabek Corporation’s balance sheet as of December 31, 2007. A) Record the journal entries for the transactions listed above: 11-Jan Cash (20,000 x $16 ) 320,000 Common Stock ( 20,000 x10) 200,000 Paid in Capital in Exce of Par-Common 120,000 1-Feb Machinery 50,000 Factory Building 110,000 Land 270,000 Preferred Stock (4,000 x 100) 400,000 Paid in Capital in excess of Par-Prederred 80,000 29-Jul Treasury Stock (1,800 x 19 ) 34,200 Cash 34,200 10-Aug Cash (1,800 x 14) 7200 Retained Earnings (1,800 x 5) 9000 Treasury Stock 16200 31-Dec Retained Earnings 37,000 Cash dividended Payable Common 5,000 Cash dividend payable preferred 32,000 31-Dec Income Summary 175,700 175,000 (B) Prepare the stockholders’ equity section of Drabek Corporation’s balance sheet as of December 31, 2007. Capital Stock Preferred stock - par value 100 per share 8 percent cumulative and non par 5,000 shares authorized 4,000 shares issued and outstanding 400,000 Common stock - par value 10 per share 50,000 shares authorized 20,000 shares issued and outstanding 200,000 Total capital stock 600,000 Additional paid in capital paid in capital in excess of par preferred 80,000 paid in capital in excess of par common 120,000 200,000 Total paid in captial 800,000 Retained Earnings 133,700 Total stockholders equity 933,700
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(EPS Computation of Basic and Diluted EPS) Edmund Halvor of the controller’s office of East Aurora Corporation was given the assignment of determining the basic and diluted earnings per share
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This note was uploaded on 01/14/2012 for the course ACCOUNTING ACC 423 taught by Professor Hannah during the Spring '09 term at University of Phoenix.

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WK 2 LT Assignment upload - (Equity Transactions and...

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