Record These Journal Entries:
1) Record the issuance of 1.10 million shares of common stock for $31 per share.
2) Record the issuance of 560,000 shares of preferred stock for $22 per share.
3) Record the purchase of 110,000 shares of its own common stock for $26 per share.
4) Record the resell 82,500 shares of treasury stock for $41 per share.
5) Record the declaration of a cash dividend on its common stock of $1.10 per share and a $672,000 (6% of par value) cash dividend on its preferred stock payable to all stockholders of record on November 15. (Hint: Dividends are not paid on treasury stock.)
6) Record the dividends declared on November 1.
Question 1
S.No. | Date | Particulars | Debit | Credit |
1 | Feb-02 | Cash A/C..Dr | 34,100,000 | |
To Common Stock | 5,500,000 | |||
To Additional Paid in Capital | 28,600,000 | |||
(To Record Issue of Common Shares) | ||||
2 | Feb 04 | Cash A/C..Dr | 12,320,000 | |
To Preferred Stock | 11,200,000 | |||
To Additional Paid in Capital | 1,120,000 | |||
(To record issue of Preferred Stock) | ||||
3 | Jun 15 | Treasury Stock A/C...Dr | 2,860,000 | |
To Cash A/C | ,2,860,000 | |||
(Being repurchase of own issued Common Stock) | ||||
4 | Aug 15 | Cash A/C..Dr | 3,382,500 | |
To Treasury Stock | 2,145,000 | |||
To Additional Paid in Capital | 1,237,500 | |||
(Being Sell of treasury stock ) | ||||
5 | Nov 01 | Retained Earnings A/C..Dr | 1,851,750 | |
To Dividend Payable - Common Stock | 1,179,750 | |||
To Dividend Payable - Preferred Stock | 672,000 | |||
(Being Cash Dividend Declared) | ||||
6 | Nov 30 | Dividend Payable - Common Stock | 1,179,750 | |
Dividend Payable - Preferred Stock | 672,000 | |||
To Cash A/C | 1,851,750 | |||
(Being Dividends paid) |
Dividends on Common Stock = 1,072,500 Shares * $ 1.1 per Share = $ 1,179,750
Requirement 2
NATIONAL LEAGUE GEAR
Balance Sheet
Stockholders Equity
December 31,2021
Particulars | Amount |
Stockholders Equity | |
Common Stock | 55,00,000 |
Preferred Stock | 1,12,00,000 |
Additional Paid in Capital | 3,09,57,500 |
Total Paid In Capital | 4,76,57,500 |
Retained Earnings | 30,08,250 |
Treasury Stock | -7,15,000 |
Total Stockholders Equity | 4,99,50,750 |
Total Stockholders Equity = Total Paid in Capital + Retained Earnings + Treasury Stock
Total Paid In Capital = Common Stock + Preferred Stock + Additional Paid in Capital
Retained Earnings = Net Income - Common Stock Dividend - Preferred Stock Dividend
Treasury Stock = Purchase of Treasury Stock - Treasury Stock Reissued
Additional Paid in Capital = 28,600,000 + 1,120,000 + 1,237,500 = $ 3,09,57,500
Treasury Stock = 2,860,000 - 2,145,000 = $ 715,000
Retained Earnings = 4,860,000 - 18,51,750 = $ 30,08,250
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