Question

The stockholders’ equity accounts of Bramble Corporation on January 1, 2020, were as follows.

Preferred Stock (8%, $48 par, 10,000 shares authorized)		$  384,000
Common Stock ($1 stated value, 2,050,000 shares authorized)		1,500,000
Paid-in Capital in Excess of Par—Preferred Stock		140,000
Paid-in Capital in Excess of Stated Value—Common Stock		1,450,000
Retained Earnings		1,750,000
Treasury Stock (10,500 common shares)		52,500

During 2020, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb.	1		Issued 25,000 shares of common stock for $124,000.
Apr.	14		Sold 6,000 shares of treasury stock—common for $33,700.
Sept.	3		Issued 4,900 shares of common stock for a patent valued at $35,100.
Nov.	10		Purchased 1,100 shares of common stock for the treasury at a cost of $5,700.
Dec.	31		Determined that net income for the year was $420,000.

No dividends were declared during the year.

Journalize the transactions and the closing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

b. Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J5 for the posting reference.) (Post entries in the order of journal entries presented in the previous part.)

c.

Prepare a stockholders’ equity section at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)

Answer 1

Bramble Corporation				-
Date	Account	Debit	Credit	Calculation
1-Feb	Cash	124,000
	Common Stock		25,000	=25,000*1
	Paid in Capital in Excess of Stated Value-Common Stock		99,000
14-Apr	Cash	33,700
	Treasury Stock		30,000	=6,000*(52,500/10,500)
	Paid in Capital from Treasury Stock		3,700
3-Sep	Patent	35,100
	Common Stock		4,900	=4,900*1
	Paid in Capital in Excess of Stated Value-Common Stock		30,200
10-Nov	Treasury Stock	5,700
	Cash		5,700
31-Dec	Income Summary	420,000
	Retained Earnings		420,000

Bramble Corporation T Accounts Date Explanation Ref Debit Preferred Stock 1-Jan Balance Credit Balance $384,000 $384,000 Paid in Capital in Excess of Par-Preferred Stock 1-Jan Balance $140,000 $140,000 Date Explanation Ref Debit Credit Balance Common Stock 1-Jan Balance $1,500,000 $1,500,000 1-Feb J5 $ 25,000 $1,525,000 3-Sep $ 4,900 $1,529,900 Paid in Capital in Excess of Stated Value-Com Stock 1-Jan Balance $1,450,000 $1,450,000 1-Feb $ 99,000 $1,549,000 3-Sep $ 30,200 $1,579,200 Retained Earnings 1-Jan Balance $1,750,000 $1,750,000 31-Dec $ 420,000 $2,170,000 Paid in Capital from Treasury Stock $ 3,700 14-Apr J5 $ 3,700 Treasury Stock $52,500 1-Jan Balance 1-Feb 3-Sep $ 30,000 $ 52,500 $ 22,500 $ 28,200 J5 $ 5,700

Bramble Corporation Balance Sheet Partial At December 31, 2020 Stockholders Equity Paid in capital Capital Stock Preferred Stock Common Stock Total Capital Stock 384,000 1,529,900 1,913,900 140,000 1,579,200 3,700 Additional Paid in capital Paid in Capital in Excess of Par-Preferred Stock Paid in Capital in Excess of Stated Value-Common Stock Paid in Capital from Treasury Stock Total Additional Paid in Capital Total Paid in Capital Retained Earnings Total Paid in Capital & Retained Earnings Less: Treasury Stock Total Stockholders Equity 1,722,900 3,636,800 2,170,000 5,806,800 28,200 5,778,600