600,000 / 100 = 6,000 preferred shares issued and outstanding
1,000,000 / 500,000 = $2 par value on common stock
01-15 Declared a cash dividend on preferred stock
The total par value of the preferred stock was $600,000 and the dividend rate is 2%.
600,000 x 2% = $12,000 dividend
Dr Retained Earnings 12,000
Cr Dividends Payable 12,000
02-14 Payment date
Dr Dividends Payable 12,000
Cr Cash 12,000
02-28 Issued 2300 shares of preferred stock in exchange for a building, details regarding the building are as follows:
Land
Fair Market Value: 15,000
Building
Fair Market Value: 225,000
When purchasing fixed assets, only the fair market value is important
Dr Land 15,000
Dr Building 225,000
Cr Preferred Stock 230,000 (2,300 x $100 par)
Cr Paid-In Capital in Excess of Par, Preferred Stock 10,000
03-17 Declared a 5% common stock dividend when the shares where trading at $25
500,000 x 5% = 25,000 shares in stock dividend
25,000 x $25 = $625,000 total amount of dividend
25,000 x $2 = $50,000 par value of dividend
Dr Retained Earnings 625,000
Cr Stock Dividends Distributable 50,000
Cr Paid-In Capital in Excess of Par, Common Stock 575,000
07-01 Distribution date for common stock pursuant to stock dividend (shares trading at $27)
The new market price ($27) does not matter.
Dr Stock Dividends Distributable 50,000
Cr Cash 50,000
07-31 Accepted subscriptions for 6,000 shares of preferred stock @$112 share receiving a 40% down payment with the subscription contracts.
Dr Cash 268,800 (40% x 6,000 x $112)
Dr Preferred Stock Subscription Receivable 403,200 (60% x 6,000 x $112)
Cr Preferred Stock Subscribed 600,000 (6,000 x $100)
Cr Paid-In Capital in Excess of Par Value, Preferred Stock 72,000
08-31 Received remaining 60% from preferred stock subscribers and issued the shares.
Dr Cash 403,200
Dr Preferred Stock Subscribed 600,000
Cr Preferred Stock Subscription Receivable 403,200
Cr Preferred Stock 600,000
09-01 Reacquired 5,000 common shares for $140,000 and placed them
Dr Treasury Stock 140,000
Cr Cash 140,000
09-30 Reissued 2,000 common shares held in treasury for $59,000
140,000 / 5,000 x 2,000 = $56,000 original cost
Dr Cash 59,000
Cr Common Treasury Stock 56,000
Cr Paid-In Capital on Sale of Treasury Stock 3,000
10-31 Reissued 3,000 common shares held in treasury for $78,000
140,000 / 5,000 x 3,000 = $84,000 original cost
Dr Cash 78,000
Dr Paid-In Capital on Sale of Treasury Stock 3,000
Dr Retained Earnings 3,000*
Cr Common Treasury Stock 84,000
*Since there wasn't enough capital in the Paid-In Capital on Sale of Treasury Stock account, the difference comes out of Retained Earnings.
Someone please help me out I'd really appreciate it, the way the professor posed it makes it very confusing. I did the first 2 entries, not really sure if they're correct.
ABC had the following selected acc balances as of jan, 1 2007
Preferred stock, 2%,$100par
(100,000 sh authorized; "????' sh issued & outstanding......600,000
Paid in capital in excess of par - preferred stock.....60,000
Common Stock, $?? par
(800,000 sh authorized, 500,000 issued&outstanding...1,000000
Paid in capital in excess of par - common stock..............300,000
Retained earnings...................................
During 2005 the following occurred:
01-15 Declared a cash dividend on preferred stock
this is what I did on this one, Idk if it's correct.
Retained earnings............60,000
Dividends payable...............................60...
02-14 Payment date
idk, if this is correct either
Dividends payable..............60,000
Cash......................................
02-28 Issued 2300 shares of preferred stock in exchange for a building, details regarding the building are as follows:
Land
Original cost: 25,000
Book Value: 25,000
Fair Market Value: 15,000
Building
Original cost: 150,000
Depreciation: 30,000
Book Value: 120,000
Fair Market Value: 225,000
03-17 Declared a 5% common stock dividend when the shares where trading at $25
07-01 Distribution date for common stock pursuant to stock dividend (shares trading at $27)
07-31 Accepted subscriptions for 6,000 shares of preferred stock @$112 share receiving a 40% down payment with the subscription contracts.
08-31 Received remaining 60% from preferred stock subscribers and issued the shares.
09-01 Reacquired 5,000 common shares for $140,000 and placed them
09-30 Reissued 2,000 common shares held in treasury for $59,000
10-31 Reissued 3,000 common shares held in treasury for $78,000
Thanks so much in advance, I really understand this it's very important, please help me.
Sent from my iPhone
