Question

Port A In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2 2021, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $25 per share Required: 1. Prepare journal entries to record these transactions 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021 (Assume net income for the first quarter 2021 was $1,250,000) Part B During 2021, the Nicklaus Corporation participated in three treasury stock transactions a. On June 30, 2021, the corporation reacquires 140.000 shares for the treasury at a price of $12 per share b. On July 31, 2021, 20,000 treasury shares are reissued at $15 per share c. On September 30, 2021 20,000 treasury shares are reissued at $10 per share Required: 1. Prepare journal entries to record these transactions 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2021. (Assume net income for the second and third quarter was $2.700.000)

Answer 1

Part A

1.

Date	General Journal	Debit	Credit
Jan. 2	Cash (2000000 x $10)	20000000
	Common stock (2000000 x $1)		2000000
	Paid-in capital in excess of par-common stock		18000000
	(To record issuance of common stock)
Jan. 2	Cash (1000000 x $25)	25000000
	Preferred stock (1000000 x $5)		5000000
	Paid-in capital in excess of par-preferred stock		20000000
	(To record issuance of preferred stock)

2. Kindly complete the balance sheet in required format if any since the same has not been provided with the question.

NICKLAUS CORPORATION
Balance Sheet (Partial)
December 31, 2021
Stockholders' Equity:
Preferred stock	5000000
Common stock	2000000
Paid-in capital in excess of par-preferred	20000000
Paid-in capital in excess of par-common	18000000
Retained earnings	1250000
Total stockholders' equity	46250000

Part B

1.

Date	General Journal	Debit	Credit
Jun. 30	Treasury stock (140000 x $12)	1680000
	Cash		1680000
	(To record purchase of treasury stock)
Jul. 31	Cash (20000 x $15)	300000
	Treasury stock (20000 x $12)		240000
	Paid-in capital from treasury stock		60000
	(To record sale of treasury stock)
Sep. 30	Cash (20000 x $10)	200000
	Paid-in capital from treasury stock	40000
	Treasury stock (20000 x $12)		240000
	(To record sale of treasury stock)

2. Kindly complete the balance sheet in required format if any since the same has not been provided with the question.

NICKLAUS CORPORATION
Balance Sheet (Partial)
December 31, 2021
Stockholders' Equity:
Preferred stock	5000000
Common stock	2000000
Paid-in capital in excess of par-preferred	20000000
Paid-in capital in excess of par-common	18000000
Paid-in capital from treasury stock	20000
Retained earnings	1250000
	46270000
Less: Treasury stock	1200000
Total stockholders' equity	45070000

Per HOMEWORKLIB RULES the first 4 parts have been answered. Please post the remaining separately. Thank you.