Question

Problem 11-2A (Part Level Submission) The stockholders' equity accounts of Blue Spruce Corp. on January 1, 2017, were as follows. Preferred Stock (8%, $100 par noncumulative, 4,300 shares authorized) Common Stock ($3 stated value, 341,000 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 (4,300 common shares) $258,000 852,500 12,900 545,600 687,500 34,400 During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Mar. 20 Oct. 1 Nov. 1 Dec. 1 Dec. 31 Issued 5,030 shares of common stock for $30,180. Purchased 1,700 additional shares of common treasury stock at $9 per share. Declared a 8% cash dividend on preferred stock, payable November 1. Paid the dividend declared on October 1. Declared a $0.80 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Determined that net income for the year was $280,100. Paid the dividend declared on December 1.

Answer 1

Blue Spruce Corporation T Accounts Date Explanation Ref Debit Credit Balance Preferred Stock 1-Jan Balance $ 258,000 $ 258,000 Paid in Capital in Excess of Par-Preferred Stock 1-Jan Balance $ 12,900 $ 12,900 Date Explanation Ref Debit Credit Balance Common Stock 1-Jan Balance $ 852,500 $ 852,500 1-Feb Shares issued $ 15,090 $ 867,590 Paid in Capital in Excess of Stated Value-Com Stock 1-Jan Balance $ 545,600 $ 545,600 1-Feb Shares issued $ 15,090 $ 560,690 Cash Dividends 1-Jan Balance 1-Oct Preferred Dividends $ 20,640 $ 20,640 1-Dec Common Dividends $ 226,557 $ 247,197 31-Dec Closing $ 247,197 $ 1-Jan Balance 31-Dec Closing 31-Dec Closing Retained Earnings $ 687,500 $ 687,500 $ 280,100 $ 967,600 $ 247,197 $ 720,403 1-Jan Balance 20-Mar Purchased Treasury Stock $ 34,400 $ 15,300 $ $ 34,400 49,700

Credit Calculation Blue Spruce Corporation Date Account 1-Feb Cash Common Stock Paid in Capital in Excess of Stated Value-Common Stock Debit 30,180 =5,030*3 15,090 15,090 15,300 =1,700*9 20-Mar Treasury Stock Cash 15,300 20,640 =258,000*8% 1-Oct Cash Dividends Dividends Payable 20,640 20,640 1-Nov Dividends Payable Cash 20,640 226,557 1-Dec Cash Dividends Dividends Payable Workings below 226,557 226,557 31-Dec Dividends Payable Cash 226,557 280,100 31-Dec Income Summary Retained Earnings 280,100 247,197 =20,640+226,557 31-Dec Retained Earnings Cash Dividends 247,197 =852,500/3 Workings Cash Dividends - Common Stock Opening Common shares Shares issued Opening Treasury Stock Treasury Stock purchased Closing Common shares outstanding Dividend per share Cash Dividends - Common Stock 284,167 5,030 (4,300) (1,700) 283,197 0.80 226,557 =283,197*0.80

Blue Spruce Corporation Balance Sheet Partial As of Dec 31, 2017 258,000 867,590 1,125,590 Stockholders Equity Paid in capital Capital Stock Preferred Stock Common Stock Total Capital Stock Additional Paid in capital Paid in Capital in Excess of Par-Preferred Stock Paid in Capital in Excess of Stated Value-Common Stock Total Additional Paid in Capital Total Paid in Capital Retained Earnings Total Paid in Capital & Retained Earnings Less: Treasury Stock Total Stockholders Equity 12,900 560,690 573,590 1,699,180 720,403 2,419,583 (49,700) 2,369,883