Question

Problem 13-04A a-c (Part Level Submission) (Video) Whispering Winds Corporation is authorized to issue 22,500 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock. On January 1, 2020, the ledger contained the following stockholders' equity balances Preferred Stock (10,500 shares) Paid-in Capital in Excess of Par-Preferred Stock Common Stock (68,500 shares) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $525,000 73,500 342,500 700,000 310,000 (b) Enter the beginning balances in the accounts, and post the journal entries to the stockholders' equity accounts. (Post entries in the order of journal entries presented in the previous part.) During 2020, the following transactions occurred. Preferred Stock Feb. 1 Issued 2,000 shares of preferred stock for land having a fair value of $125,000 Mar. 1 Issued 1,300 shares of preferred stock for cash at $70 per share. July 1 Issued 16,000 shares of common stock for cash at $7 per share. Sept. 1 Issued 400 shares of preferred stock for a patent. The asking price of the patent was $28,000. Market price for the preferred stock was $70 and the fair value for the patent was indeterminable. Dec. 1 Issued 8,000 shares of common stock for cash at $7.50 per share. Dec. 31 Net income for the year was $260,000. No dividends were declared. (a) Your answer is correct. Common Stock Journalize the transactions and the dosing 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.) Credit Date Trebi Account Titles and Explanation land Preferred Stock = IT 25000 Paid-in Capital in Excess of ParPreferred Stock Mar, 1 T Paid-in Capital in Excess of Par-Preferred Stock cash T Preferred Stock = = 65000 26000 = Paid-in Capital in Excess of Par-Preferred Stock = Tcash 1 Common Stock = 80000 Paid-in Capital in Excess of Par-Common Stock T Paid-in Capital in Excess of Par-Common Stock 32000 ept. 1 Patents 28000 Preferred Stock 20000 T Paid-in Capital in Excess of Par-Preferred Stock IT 8000 Tash Retained Earnings T Common Stock Ī 40000 T Paid-in Capital in Excess of Par-Common Stock 20000 IT 250000 Dec. 31 T Income Summary | Retained Earnings 260000 Click if you would like to Show Work for this question: Open Show Work

Answer 1

Preferred Stock
		Opening Balance	$ 5,25,000.00
		Feb 1-Land	$ 1,00,000.00
		Mat 1-Cash	$     65,000.00
Dec 31-Closing Balance	$        7,10,000.00	Sept 1-Patents	$     20,000.00
	$        7,10,000.00		$ 7,10,000.00
Common Stock
		Opening Balance	$ 3,42,500.00
		July 1-Cash	$     80,000.00
Dec 31-Closing Balance	$        4,62,500.00	Dec 1-Cash	$     40,000.00
	$        4,62,500.00		$ 4,62,500.00
Paid-in capital in excess of Par-Preferred Stock
		Opening Balance	$     73,500.00
		Feb 1-Land	$     25,000.00
		Mat 1-Cash	$     26,000.00
Dec 31-Closing Balance	$        1,32,500.00	Sept 1-Patents	$       8,000.00
	$        1,32,500.00		$ 1,32,500.00
Paid-in capital in excess of Par-Common Stock
		Opening Balance	$ 7,00,000.00
		July 1-Cash	$     32,000.00
Dec 31-Closing Balance	$        7,52,000.00	Dec 1-Cash	$     20,000.00
	$        7,52,000.00		$ 7,52,000.00
Retained Earnings
		Opening Balance	$ 3,10,000.00
Dec 31-Closing Balance	$        5,70,000.00	Dec 31-Income Summary	$ 2,60,000.00
	$        5,70,000.00		$ 5,70,000.00