Question

On January 5, 2020, Sweet Corporation received a charter granting the right to issue 4,600 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 45,800 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,900 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 3,700 shares of preferred stock for the following assets: equipment with a fair value of $49,900; a factory building with a fair value of $147,000; and land with an appraised value of $256,000. July 29 Purchased 2,000 shares of common stock at $15 per share. (Use cost method.) Aug. 10 Sold the 2,000 treasury shares at $13 per share. Dec. 31 Declared a $0.40 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31 Closed the Income Summary account. There was a $179,600 net income.

Answer 1

solution Date Debit Gredit [11- Jan 334400 Descuelphlon / Account cash ( 20900 X16) common stock (20900X10) paid in capital in excess of par common [ 334400 – 209000] 209000 125400 1-feb 49900 370000 82900 129-Jul 30000 10 Aug Land 256000 factory Building 147000 Machinery preferred Stock ( 3700X100) paid in capital in excess of par preferred Treasury estock (2000x15) 30000 Cash Cash ( 2000 X 13) 26000 Retained earnings (2000X2) 4000 Tereasury Stock (2000X15) Retained earnings 34260 cash dividend payable preferred [ 3700 x 100 x 7/100] Cash dividend payable common [ 20900 X 0.40) Income Summary Retained earnings 30000 131-Dec 25900 8360 31-Dec 199600 129600

Sweet Corporation Stockholders Equilty Dec 31, 2020 capital Stock preferred stock par value 100 per share 7% Cumulative and non participating, 4600 3700 shares are authorized, shares are Issued and outstanding [3700 x 100 370000 Common stock par value 10 per share 49900 Share are authorized outstanding 209000 20900 Shares are issued and 20900 X 10 ] 579000 82900 Total capital Stock Additional paid in capital: paid in capptal excess of pars preferred paid in capital excess of par; common; Total paid in capital Retalned earnings [179600 -4000 – 34260] Total stock holder's equity 125400 208300 787300 141340 928640