Question

Minor Company is authorized to sell 1,200,000 shares preferred stock. As of the end of the current year, th 40,000 shares of preferred stock at S shares have been repurchased at $23 per share stock option plan that the company intends to implement orized to sell 1,200,000 shares of $10 par value common stock and 60,000 shares of $100 par value 6 percent nd of the current year, the company has actually sold 550.000 shares of common stock at $12 per share and erred stock at $110 per share. In addition of the 550,000 shares of common stock that have been sold, 25,000 purchased at 323 per share and are currently being held in treasury to be used to meet the future requirements of a. Prepare the general journal entries required to record all of the above transactions b. Prepare the stor • Prepare the stockholders' equity section of Minor's balance sheet to reflect the transactions you have recorded. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the stockholders' equity section of Minor's balance sheet to reflect the transactions you have recorded. Stockholders' Equity

Answer 1

a)

Date	Account title	Debit	credit
1	Cash (550000*12)	6600000
	Common stock (550000*10)		5500000
	Paid in capital in excess of par -common stock		1100000
2	Cash (40000*110)	4400000
	Preferred stock (40000*100)		4000000
	Paid in capital in excess of par -preferred stock		400000
3	Treasury stock (25000*23)	575000
	cash		575000

B)

STOCKHOLDERS EQUITY SECTION
Stockholders equity
Paid in capital
capital stock
6%, 60000 preferred shares of $ 100 Par ,40000 shares issued	4000000
1,200,000 authorized common shares of $ 10 par ,550000 shares issued	5500000
Additional paid in capital
Paid in capital in excess of par -preferred stock	400000
Paid in capital in excess of par -common stock	1100000
Total paid in capital	11000000
less:Treasury stock	- 575000
Total stockholders equity	10,425,000