Question

The stockholders' equity accounts of Culver Corporation on lanuary 1, 2017, were as follows. Preferred Stock (6%, $100 par noncumulative, 4,850 shares authorized) Common Stock ($3 stated value, 316,000 shares authorized) Paid-in Capital in Excess of Par Value ---Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (4,850 common shares) $291,000 790,000 14,550 505,600 694,500 38,800 During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 4,700 shares of common stock for $32,900. Mar. 20 Purchased 1,650 additional shares of common treasury stock at $9 per share. Oct. 1 Declared a 6% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. Determined that net income for the year was $276,400. Paid the dividend declared on December 1. Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.) (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Answer 1

Journal Entries
Date	Account Titles and Explanations	Debit	Credit
Feb. 1	Cash	$32,900
	Common Stock (4,700 * $3)		$14,100
	Paid-in Capital in Excess of Stated Value - Common Stock ($32,900 - $14,100)		$18,800
	(To record the issue of common stock)
Mar. 20	Treasury Stock (1,650 * $9)	$14,850
	Cash		$14,850
	(To record the purchase of treasury stock)
Oct. 1	Preferred Dividends ($291,000*6/100)	$17,460
	Preferred Dividends Payable		$17,460
	(To record the declaration of 6% preferred dividends)
Nov. 1	Preferred Dividends Payable	$17,460
	Cash		$17,460
	(To record the payment of preferred dividends)
Dec. 1	Dividends ($790,000/$3 = 263,333 shares + 4,700 - 4,850 - 1,650 = 261,533*$0.85)	$222,303
	Dividends Payable		$222,303
	(To record the declaration of dividends on common stock)
Dec. 31	Income Summary	$276,400
	Retained Earnings		$276,400
	(To close the net income to retained earnings)
Dec. 31	Dividends Payable	$222,303
	Cash		$222,303
	(To record the payment of dividends on common stock)
Dec. 31	Retained Earnings ($222,303 + $17,460)	$239,763
	Preferred Dividends		$17,460
	Dividends		$222,303
	(To close the preferred dividends and dividends on common stock to retained earnings)

Ledger Accounts
Preferred Stock
		Beg. Bal.	$291,000
End. Bal.	$291,000
Paid-in Capital in Excess of Par Value - Preferred Stock
		Beg. Bal.	$14,550
End. Bal.	$14,550
Common Stock
		Beg. Bal.	$790,000
		Feb. 1	$14,100
End. Bal.	$804,100
Paid-in Capital in Excess of Stated Value - Common Stock
		Beg. Bal.	$505,600
		Feb. 1	$18,800
End. Bal.	$524,400

PINA COLADA CORP.
Partial Balance Sheet
December 31, 2017.
Paid-in Capital Portion of the Stockholders' Equity:
Preferred Stock (6%, $100 par noncumulative, 4,850 shares authorized)
Common Stock ($3 stated value, 316,000 shares authorized)
Preferred Stock (Outstanding 29,100 shares at $100 par)	$291,000
Common Stock (Outstanding 268,033 shares at $3 stated value)	$804,100
Total Capital Stock		$1,095,100
Paid-in Capital in Excess of Par and Stated Value:
Paid-in Capital in Excess of Par Value - Preferred Stock	$14,550
Paid-in Capital in Excess of Stated Value - Common Stock	$524,400
Total Paid-in Capital in Excess of Par and Stated Value		$538,950
Treasury Stock ($38,800 + $14,850)		($53,650)
Total Paid-in Capital Portion of the Stockholders' Equity		$1,580,400