received a charter granting the right to issue 5000 shares of 10000 par value 8

Received a charter granting the right to issue 5000

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received a charter granting the right to issue 5,000 shares of $100.00 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10.00 par value common stock. It then completed these transactions. Jan 11 Issued 20,000 shares of common stock at $16 per share. Feb 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following: Machinery with a fair market value of $50,000 A factory building with a fair market value of $160,000 and, land with an appraised value of $270,000 Jul 29 Purchased 1,800 shares of common stock at $17 per share. (Use the 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 dividend. Dec 31 Closed the Income Summary account. There was a $175,700 net income. Instructions: Jan 11, 14 Cash (20,000 shares × $16.00) 320,000 Common Stock (20,000 shares × $10.00) 200,000 Paid-in Capital in Excess of Par—Common 120,000 Feb 1, 14 Equipment 50,000 Buildings 160,000 Land 270,000 Preferred Stock (4,000 shares × $100.00) 400,000 Paid-in Capital in Excess of Par—Preferred 80,000 Jul 29, 14 Treasury Stock (1,800 shares × $17.00) 30,600 Cash 30,600 Aug 10, 14 Cash (1,800 shares × $14.00) 25,200 Retained Earnings (1,800 shares × $3.00) 5,400 Treasury Stock (1,800 shares × $17.00) 30,600 Dec 31, 14 Retained Earnings 37,000 Dividend Payable 37,000 Preferred Stock Dividends = 4,000 shares × $100 × 8.00 = $32,000 Common Stock Dividends = 20,000 shares × $0.25 = $5,000.00 Dec 31, 14 Income Summary 175,700 Retained Earnings 175,700 PHELPS CORPORATION Statement of Stockholders' Equity December 31, 2014 Capital Stock $400,000 200,000 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 capital 800,000 Retained earnings ($175,700 - $5,400 - $37,000) 133,300 Total stockholders’ equity $933,300 Intermediate Accounting , 15 th Edition by Kieso, Weygandt, and Warfield P15-1 (Equity Transactions and Statement Preparation) On January 5, 2014, Phelps Corporation (a) Record the journal entries for the transactions listed above. *(The debit is made to Retained Earnings because no Paid-in Capital * from Treasury Stock exists.) (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2014.
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