Question

CALCULATOR FULL SCREEN PRINTER VERSION 1BACK Nash Company was formed on July 1, 2015. It was authorized to issue 296,200 shares of $10 par value common stock and 104,100 shares of 7% $25 par value, cumulative and nonparticipating preferred stock. Nash Company has a July 1-June 30 fiscal year. The following information relates to the stockholders' equity accounts of Nash Company. Common Stock Prior to the 2017-2018 fiscal year, Nash Company had 114,200 shares of outstanding common stock issued as follows. 89,000 shares were issued for cash on July 1, 2015, at $31 per share. 1. 2. On July 24, 2015, 5,000 shares were exchanged for a plot of land which cost the seller $71,800 in 2009 and had an estimated fair value of $211,200 on July 24, 2015. 3. 20,200 shares were issued on March 1, 2016, for $41 per share. During the 2017-2018 fiscal year, the following transactions regarding common stock took place. November 30, 2017 Nash purchased 2,100 shares of its own stock on the open market at $42 per share. Nash uses the cost method for treasury stock. Nash declared a 5% stock dividend for stockholders of record on January 15, 2018, to be issued on January 31, 2018. Nash was having a liquidity problem and could not afford a cash dividend at the time. Nash's common stock was selling at $48 per share on December 15, 2017. December 15, 2017 June 20, 2018 Nash sold 540 shares of its own common stock that it had purchased on November 30, 2017, for $25,000. Preferred Stock Nash issued 41.500 shares of preferred stock at $47 per share on July 1, 2016. Cash Dividends Nash has followed a schedule of declaring cash đividends in December and June, with payment being made to stockholdere of record in the following month. The cash dividends which have been declared since inception of the company through June 30, 2018, are shown below. Declaration Date Common Stock Preferred Stock 12/15/16 $0.30 per share $1 per share 6/15/17 $0.30 per share $1 per share

Answer 1

		Shares outstanding as on June30,2017
		Common Stock:
		89000 share $10 par value	$890,000
		Additional Paid in Capital	$1,869,000	(31-10)*89000
		5000 shares $10 par value	$50,000
		Additional Paid in Capital	$161,200	(211200-50000)
		20200 shares $10 par value	$202,000
		Additional Paid in Capital	$626,200	(41-10)*20200
		Total Common Stock Outstanding(114200 shares)	$1,142,000	(890000+50000+202000)
		Total Additional Paid in Capital-Common Stock	$2,656,400	(1869000+161200+626200)
		PREFERENCE STOCK
		41500 7% Preference shares $25 par value	$1,037,500	($25*41500)
		Additional Paid in Capital-Preference shares	$664,000	(41-25)*41500)
		JOURNAL ENTRY FOR 2017-18
	DATE	ACCOUNT	DEBIT	CREDIT
	Nov,30,2017	Treasury Stock	$88,200		(2100*42)		5605
		Cash		$88,200
	Dec.15,2017	Retained Earnings	$269,040		(48*(114200-2100)*5%
		Common Stock dividend distributable		$56,050	(10*(114200-2100)*5%
		Additional Paid in Capital-Common Stock		$212,990
		(Number of shares in dividend =5%*(114200-2100)=5605
	June,20,2018	Cash	$25,000
		Tresury Stock		$22,680	(540*42)
		Additional Paid in Capital -Treasury Stock		$2,320	(25000-22680)
	Dec15. 2017	Retaing Earnings	$41,500
		Cash (Preference dividends)		$41,500
		BALANCE AS ON JUNE30,2018
		Common Stock	$1,198,050	(1142000+56050)
		Additional Paid in Capital-Common Stock	$2,869,390	(2656400+212990)
		Tresury Stock	$65,520	(88200-22680)
		Additional Paid in Capital -Treasury Stock	$2,320
		Preference Stock:
		41500 7% Preference shares $25 par value	$1,037,500
		Additional Paid in Capital-Preference shares	$664,000
		Retained Earnings:
		Retained Earning as on June 30,2017	$666,300
		Add:Net Income	$39,000
		Less: Stock Dividend	$269,040
		Les: Cash dividend	$41,500
		Retained Earnings as on June 30,2018	$394,760
		STOCKHOLDERS EQUITY
		Preference Shares:
		104100 shares of 7% $25 par value authorized
		Issued 41500 shares	$1,037,500
		Additional Paid in Capital-Preference shares	$664,000
		Common Stock:
		296200 shares $ 10 par value authorized
		Issued 119805 shares	$1,198,050
		Additional Paid in Capital-Common Stock	$2,869,390
		Treasury Stock:
		Tresury Stock	-$65,520
		Additional Paid in Capital -Treasury Stock	$2,320
		Retained Earnings	$394,760
		TOTAL STOCKHOLDERS' EQUITY	$6,100,500