Reporting Stockholders'
Equity
Using the following accounts and balances, prepare the
Stockholders' Equity section of the balance sheet using Method 1 of
Exhibit 8. 100,000 shares of common stock authorized, and 1,000
shares have been reacquired.
| Common Stock, $40 par |
$3,200,000 |
| Paid-In Capital from Sale of Treasury Stock |
64,000 |
| Paid-In Capital in Excess of Par—Common Stock |
720,000 |
| Retained Earnings |
1,568,000 |
| Treasury Stock |
29,000 |
|
|
| Stockholders' Equity |
| Paid-In Capital: |
|
|
| Common Stock, $40 Par |
$ |
|
| Excess over par |
|
|
| Paid-in capital, common stock |
|
$ |
| Treasury Stock |
|
|
| Total Paid-in Capital |
|
$ |
|
|
|
| Total |
|
$ |
|
|
|
| Total Stockholders' Equity |
|
$ |
On October 31, Legacy Rocks Inc., a marble contractor, issued
for cash 77,000 shares of $10 par common stock at $11, and on
November 19, it issued for cash 17,040 shares of preferred stock,
$50 par at $53.
Required:
| A. |
Journalize the entries for October 31 and November 19. Refer to
the Chart of Accounts for exact wording of account titles. |
| B. |
What is the total amount invested (total paid-in capital) by
all stockholders as of November 19? |
| CHART OF ACCOUNTS |
| Legacy Rocks Inc. |
| General Ledger |
|
ASSETS |
| 110 |
Cash |
| 120 |
Accounts Receivable |
| 131 |
Notes Receivable |
| 132 |
Interest Receivable |
| 141 |
Merchandise Inventory |
| 145 |
Office Supplies |
| 151 |
Prepaid Insurance |
| 181 |
Land |
| 193 |
Equipment |
| 194 |
Accumulated Depreciation-Equipment |
|
LIABILITIES |
| 210 |
Accounts Payable |
| 221 |
Notes Payable |
| 226 |
Interest Payable |
| 231 |
Cash Dividends Payable |
| 236 |
Stock Dividends Distributable |
| 241 |
Salaries Payable |
| 261 |
Mortgage Note Payable |
|
EQUITY |
| 311 |
Common Stock |
| 312 |
Paid-In Capital in Excess of Par-Common Stock |
| 315 |
Treasury Stock |
| 321 |
Preferred Stock |
| 322 |
Paid-In Capital in Excess of Par-Preferred Stock |
| 331 |
Paid-In Capital from Sale of Treasury Stock |
| 340 |
Retained Earnings |
| 351 |
Cash Dividends |
| 352 |
Stock Dividends |
| 390 |
Income Summary |
|
The declaration, record, and payment dates in connection with a
cash dividend of $108,000 on a corporation’s common stock are
January 12, March 13, and April 12.
Journalize the entries required on each date. If no entry is
required, simply skip to the next transaction. Refer to the Chart
of Accounts for exact wording of account titles.
