Question

EF 212 HANDOUT 13 PI. In January 2014, the Jones Corporation was organized and authorized to issue 2,000,000 shares of $1 par common stock. The stock-related transactions for the first year's operations were as follows: Jan. 19 Sold 15,000 shares of the common stock for $31,500 Feb. 7 35,000 shares of common stock for a building that had an appraised value of $89,000 July 15 Issued) 5,000 shares of common stock for $15,000. Declared a cash dividend of $0.15 per common share to be paid on September 25 to stockholders of record on September 15 Cash dividends date of record. Paid cash dividends to stockholders of record on September 15 Issued 4,000 shares of common stock for a piece of land. The land had a fair market value of Sept. 1 15 ct. 30 $12,000. et income earned during the year was $100,000. I. Prepare journal entries to record the transactions above. 2. Post the entries to T accounts. Prepare T accounts for Preferred Stock; Common Stock; Paid-in apital in Excess of Par Value, Common; Retained Earnings, Treasury Stock, Paid-in Capital from Treasury Stock Transactions). Prepare the stockholders' equity section of Jones Corporation's balance sheet as of December 31, 3. 2014

Answer 1

Solution:

Date	Particulars	Debit	Credit
Jan-19	Cash	$31,500.00
	Paid in capital - In excess of stated value		$16,500.00
	Common stock		$15,000.00
Jan-21	Organization expenses	$11,000.00
	Paid in capital - In excess of stated value		$6,000.00
	Common stock		$5,000.00
Feb-07	Building	$78,000.00
	Paid in capital - In excess of stated value		$48,000.00
	Common stock		$30,000.00
Mar-22	Treasury stock	$30,000.00
	Cash		$30,000.00
Jul-15	Stock options	$15,000.00
	Paid in capital - In excess of stated value		$10,000.00
	Common stock		$5,000.00
Aug-01	Cash	$10,000.00
	Ttreasury stock		$7,500.00
	Paid in capital - In excess of treasury stock		$2,500.00
Sep-01	Cash dividends	$7,125.00
	Cash dividends declared		$7,125.00
Sep-15	No journal entry
Sep-25	Cash dividends	$7,125.00
	Cash		$7,125.00
Oct-30	Land	$12,000.00
	Paid in capital - In excess of stated value		$8,000.00
	Common stock		$4,000.00
Dec-15	Cash	$110,000.00
	Preferred stock		$110,000.00

2) Enclosed

3)

Stockholder's equity section
	Amount
Capital stock
Preferred stock	$110,000.00
Common stock	$59,000.00
Total capital stock	$169,000.00
Paid in capital - In excess of stated value	$88,500.00
Paid in capital -Sale of treasury stock	$2,500.00
Total paid in capital	$260,000.00
Retained earnings	$92,875.00
Minus: Treasury stock	-$22,500.00
Total shareholder's equity	$330,375.00
Total equity	$330,375.00
Outstanding shares	47,500
BV per share	$6.96