Question

Problem 11-2A The stockholders' equity accounts of Concord Corporation on January 1, 2017, were as follows. Preferred Stock (6%, $100 par noncumulative, 4,750 shares authorized) $285,000 Common Stock ($4 stated value, 311,000 shares authorized) 1,036,666 Paid-in Capital in Excess of Par Value-Preferred Stock 14,250 Pald-in Capital in Excess of Stated Value-Common Stock 497,600 Retained Earnings 705,000 Treasury Stock (4,750 common shares) 38,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Mar. 20 Oct. 1 Nov. 1 Dec. 1 Dec. 31 Issued 4,520 shares of common stock for $27,120. Purchased 1,100 additional shares of common treasury stock at $9 per share. Declared a 6% cash dividend on preferred stock, payable November 1. Paid the dividend declared on October 1. Declared a $0.65 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Determined that net income for the year was $283,200. Paid the dividend declared on December 1.

Answer 1

Journal entries:

Date	Account title and explanation	Debit	Credit
Feb.1	Cash	$27,120
	Common stock [4,520 x $4]		$18,080
	Paid-in capital in excess of stated value- common stock		$9,040
	[Issuance of common stock]
Mar.20	Treasury stock   [1,100 x $9]	$9,900
	Cash		$9,900
	[Repurchase of own shares]
Oct.1	Cash Dividends   [285,000 x 6%]	$17,100
	Dividends payable-preferred		$17,100
	[Declaration of cash dividends]
Nov.1	Dividends payable-preferred	$17,100
	Cash		$17,100
	[Payment of cash dividends]
Dec.1	Cash Dividends [257,837* x $0.65]	$167,594
	Dividends payable-common		$167,594
	[Declaration of cash dividends]
Dec.31	Income summary	$283,200
	Retained earnings		$283,200
	[To record net income]
Dec.31	Retained earnings	$184,694
	Dividends [17,100+167,594]		$184,694
	[To close cash dividends]
Dec.31	Dividends payable-common	$167,594
	Cash		$167,594
	[To record payment of cash dividends payable]

*Outstanding Common shares
Beginning ($1,036,666/$4)	259,167
New issue	4,520
Treasury stock:
Beginning	-4,750
Mar.20	-1,100
Balance	257,837

T-Accounts:

Preferred stock
		Beg.	$285,000
		End.	$285,000
Common stock
		Beg.	$1,036,666
		Feb.1	$18,080
		End.	$1,054,746
Paid-in capital in excess of par value-Preferred stock
		Beg.	$14,250
		End.	$14,250
Paid-in capital in excess of stated value-common stock
		Beg.	$497,600
		Feb.1	$9,040
		End.	$506,640
Retained earnings
Dec.31	$184,694	Beg.	$705,000
		Dec.31	$283,200
		End.	$803,506
Cash dividends
Oct.1	$17,100
Dec.1	$167,594
End.	$184,694
Treasury stock
Beg.	$38,000
Mar.20	$9,900
End.	$47,900

Balance Sheet:

INDIGO CORPORATION
Partial Balance Sheet
December 31,2022
Stockholder's equity:
Paid-in capital
Capital stock
Preferred stock	$285,000
Common stock	$1,054,746
Total capital stock		$1,339,746
Additional paid-in capital
In excess of par value-preferred stock	$14,250
In excess of stated value-common stock	$506,640
Total additional paid-in capital		$520,890
Total Paid-in capital		$1,860,636
Retained earnings		$803,506
Total paid-in capital and retained earnings		$2,664,142
(less): Treasury stock		($47,900)
Total stockholder's equity		$2,616,242