Question

Problem 11-03A (Part 1) On December 31, 2021, Cullumber Company had 1,290,000 shares of $6 par common stock issued and outstanding. At December 31, 2021, stockholders’ equity had the amounts listed here. Common Stock $7,740,000 Additional Paid-in Capital 1,760,000 Retained Earnings 1,235,000 Transactions during 2022 and other information related to stockholders’ equity accounts were as follows. 1. On January 10, issued at $106 per share 125,000 shares of $104 par value, 8% cumulative preferred stock. 2. On February 8, reacquired 13,200 shares of its common stock for $12 per share. 3. On May 9, declared the yearly cash dividend on preferred stock, payable June 10, to stockholders of record on May 31. 4. On June 8, declared a cash dividend of $1.05 per share on the common stock outstanding, payable on July 10, to stockholders of record on July 1. 5. Net income for 2022 was $3,651,000.

Record the journal entries that are required for items 1–5 above. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 (To close net income) Jan. 10Feb. 8May 9Jun. 8Jun. 10Jul. 10Dec. 31 (To close cash dividends)

List Of Accounts

Problem 11-03A

Accounts Payable Accounts Receivable Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accumulated Other Comprehensive Income Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Bad Debt Expense Buildings Cash Cash Dividends Common Stock Common Stock Dividends Distributable Depreciation Expense Dividends Payable Equipment Income Summary Income Tax Expense Income Taxes Payable Insurance Expense Interest Expense Interest Payable Inventory Land Loss on Disposal of Plant Assets Miscellaneous Expense No Entry Notes Payable Other Operating Expenses Organization Expense Paid-in Capital in Excess of Par Value-Common Stock Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Preferred Stock Prepaid Expenses Prepaid Insurance Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Service Revenue Stock Dividends Supplies Supplies Expense Treasury Stock Unearned Service Revenue Utilities Expense

Answer 1

date account titles and explanation debit credit calculation 10-Jan $ 13,250,000 Cash Preferred Stock Paid-in Capital in Excess of Par Value-Preferred Stock (to record issue of preferred stock) $ 13,000,000 $ 250,000 125,000*$106 125,000*$104 125,000*$2 $ 158,400 13,200*$12 08-Feb Treasury Stock Cash (to record purchase of treasury stock) $ 158,400 $ 1,040,000 125,000*$104*8% 09-May Cash Dividends Dividends Payable (to record declaration of preferred dividends) $ 1,040,000 $ 1,340,640 (1,290,000-13,200)*$1.05 08-Jun Cash Dividends Dividends Payable (to record declaration of common stock dividends) $ 1,340,640 10-Jun $ 1,040,000 Dividends Payable Cash (to record payment of preferred dividends) $ 1,040,000 $ 1,340,640 10-Jul Dividends Payable Cash (to record payment of common stock dividends) $ 1,340,640

date account titles and explanation debit credit calculation $ 1,340,640 10-Jul Dividends Payable Cash (to record payment of common stock dividends) $ 1,340,640 $ 3,651,000 31-Dec Income Summary Retained Earnings (to close net income) $3,651,000 $ 2,380,640 $1,040,000+$1,340640 31-Dec Retained Earnings Cash Dividends (to close cash dividends) $ 2,380,640

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