Question

Problem 20.5A Issuing stock at par and at premium, preparing Stockholders' Equity section of balance sheet, and recording stock subscriptions. LO 20-6, 20-7, 20-9. 20-11 Cate Corp. was organized on March 1, 2019, to operate a delivery service. The firm is authorized to issue 75,000 shares of no-par- value common stock with a stated value of $100 per share and 30,000 shares of $100 par value. 8 percent preferred stock that is nonparticipating and noncumulative. Selected transactions that took place during March 2019 follow. kipped Book 101 Cash 114 Subscriptions Receivable--Common Stock 115 Subscriptions Receivable-Preferred Stock 301 Common Stock 302 Coron Stock Subscribed 305 Paid-in Capital in Excess of stated Value-Common 311 Preferred Stock 312 Preferred Stock Subscribed 315 Paid-in Capital in Excess of Par Value-Preferred erences DATE TRANSACTIONS March 1 The corporation received its charter. (Make a memorandum entry) 1 Issued 625 shares of common stock for cash at $100 per share to Jerri Harris 3 Issued 375 shares of preferred stock for cash at par value to Gloria Amos. 5 Issued 375 shares of common stock for cash at $106 to Carolyn Reed. 5 Received a subscription for 425 shares of common stock at $106 per share from Joan Patterson, payable in two installments due in 10 and 20 days. 14 Received a subscription for 275 shares of preferred stock at $108 per share from Robert Tolliver, payable in two installments due in 15 and 30 days. 20 Received payment of a stock subscription installment due from Joan Patterson (one-half of the purchase price-see March 5 transaction). 99 Rerobernament of actor cu cerintinn Inetallment du from abort Talliner

Answer 1

1. Here's the list of journal entries for said transactions- Explanation column has been provided for understanding purpose only and not part of answer:

Date Dr / Cr Acct Code Account Title Debit Credit Explanation Cr Cr Memo: Corporation authorised to issue 75,000 no-par common stock with stated value of $ 100 per share and 30,000 8% Mar-01 preferred stock @ $ 100 par value Mar-01 Dr 101 Cash 62,500.00 625 shares @ $100 per share 301 Common stock 62,500.00 (to record issuance of 625 common stock @ stated value of $100 per share) Mar-03 Dr 101 Cash 37,500.00 375 shares @ $ 100 per share 311 Preferred Stock 37,500.00 (To record issuance of 375 preferred stock @par value of $100 per share) Mar-05 Dr 101 Cash 39,750.00 375 shares @ $ 106 per share 301 Common stock 37,500.00 375 shares @ $ 100 per share 305 Paid in capital in excess of stated value - common stock 2,250.00 375 shares @ $6 per share (To record issuance of 375 shares @ $106 per share) Mar-05 Dr 114 Subscription Receivable - Common stock 45,050.00 425 shares @ $ 106 per share Cr 302 Common stock subscribed 45,050.00 (To record subscription received for 425 shares @ $ 106 per share) Mar-14 Dr 115 Subscription Receivable - Preferred stock 29,700.00 275 shares @ $ 108 per share 312 Preferred Stock Subscribed 29,700.00 (To record subscription received for 275 shares @ $ 108 per share) Mar-20 Dr 101 Cash 22,525.00 One half of purchase of 425 shares @ $ 106 per share 114 Subscription Receivable - Common stock 22,525.00 One half of purchase of 425 shares @ $ 106 per share (to record receipt of subscription) Mar-20 Dr 302 Common stock subscribed 22,525.00 One half of purchase of 425 shares @ $ 106 per share 301 Common stock 21,250.00 One half of purchase of 425 shares @ $ 100 per share 305 Paid in capital in excess of stated value - common stock 1,275.00 One half of purchase of 425 shares @ $6 per share (to record allocation of subscription received against common stock) Mar-29 Dr 101 Cash 14,850.00 One half of purchase of 275 shares @ $ 108 per share 115 Subscription Receivable - Preferred stock 14,850.00 One half of purchase of 275 shares @ $ 108 per share (to record receipt of subscription) Mar-29 Dr 312 Preferred Stock Subscribed 14,850.00 One half of purchase of 275 shares @ $ 108 per share 311 Preferred Stock 13,750.00 One half of purchase of 275 shares @ $ 100 per share 315 Paid in capital in excess of Par value - preferred stock 1,100.00 One half of purchase of 275 shares @ $ 8 per share (to record allocation of subscription received against Preferred stock) Mar-30 Dr 101 Cash 22,525.00 One half of purchase of 425 shares @ $ 106 per share 114 Subscription Receivable - Common stock 22,525.00 One half of purchase of 425 shares @ $ 106 per share (to record receipt of subscription) Mar-30 Dr 302 Common stock subscribed 22,525.00 One half of purchase of 425 shares @ $ 106 per share 301 Common stock 21,250.00 One half of purchase of 425 shares @ $ 100 per share cr 305 Paid in capital in excess of stated value - common stock 1,275.00 One half of purchase of 425 shares @ $6 per share (to record allocation of subscription received against common stock)

2. Here's the stockholder's Equity section of balance sheet: Total of this section reconciles with cash balance of said entries:

Stockholder's Equity section of Balance sheet Acct Code Acct Title Amount 301 Common stock 142,500.00 (625+375+425) shares @ $ 100 per share 311 Preferred Stock 51,250.00 (375+(275/2) shares @ $ 100 per share 305 Paid in capital in excess of stated value - common stock 4,800.00 (375+425) shares @ $ 6 per share 315 Paid in capital in excess of Par value - preferred stock 1,100.00 (275/2) shares @ $ 8 per share 312 Preferred Stock Subscribed 14,850.00 (275/2) shares @ $ 108 per share 115 Subscription Receivable - Preferred stock -14,850.00 199,650.00