Question

Selected Stock Transactions

The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:

Preferred 2% Stock, $125 par (70,000 shares authorized, 35,000 shares issued)	$4,375,000
Paid-In Capital in Excess of Par—Preferred Stock	700,000
Common Stock, $25 par (800,000 shares authorized, 320,000 shares issued)	8,000,000
Paid-In Capital in Excess of Par—Common Stock	1,040,000
Retained Earnings	29,924,000

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

1. Issued 80,000 shares of common stock at $32, receiving cash.
2. Issued 18,000 shares of preferred 2% stock at $140.
3. Purchased 48,000 shares of treasury common for $30 per share.
4. Sold 24,000 shares of treasury common for $33 per share.
5. Sold 16,000 shares of treasury common for $28 per share.
6. Declared cash dividends of $2.50 per share on preferred stock and $0.06 per share on common stock.
7. Paid the cash dividends.

Journalize the entries to record the transactions.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Required:

a. Issued 80,000 shares of common stock at $32, receiving cash.

b. Issued 18,000 shares of preferred 2% stock at $140.

c. Purchased 48,000 shares of treasury common for $30 per share.

d. Sold 24,000 shares of treasury common for $33 per share.

e. Sold 16,000 shares of treasury common for $28 per share.

f. Declared cash dividends of $2.50 per share on preferred stock and $0.06 per share on common stock.

g. Paid the cash dividends.

Answer 1

DATE	PARTICULARS	DEBIT($)	CREDIT($)
A B C D F G	Cash    TO Common stock    TO Paid in excess of PAR (i.e 25) (Being common stock issued at premium ) Cash     To preferred stock     To paid in excess of par value of preferred stock (Being preferred stock issued at premium ) Treasury stock       To cash (Being treasury stock purchased for cash ) Cash      To Treasury stock      To paid in capital (Being treasury stock paid in excess of purchase price ) Cash Pain in capital       To treasury stock (Being dividend declared but not paid so no entry required)	2560000 2520000 1440000 792000 448000 32000	2000000 560000 2250000 270000 1440000 720000 72000 480000
DATE H	PARTICULARS Common stock dividend (800000+80000*0.06) Preferred stock dividend (70000+18000*2.50)                To cash (Being dividend paid in cash )	DEBIT($) 52800 220000	CREDIT($) 272800