Question

Concord Corp. completed the following transactions in 2014, the first year of operation:

1.	Issued 16,000 shares of $18 par common stock for $27 per share.
2.	Issued 6,200 shares of $54 par, 7 percent, preferred stock at $56 per share.
3.	Paid the annual cash dividend to preferred shareholders.
4.	Issued a 5 percent stock dividend on the common stock. The market value at the dividend declaration date was $36 per share.
5.	Later that year, issued a 2-for-1 split on the 16,800 shares of outstanding common stock.
6.	Earned $254,800 of cash revenues and paid $137,500 of cash operating expenses. Required a. Record each of these events in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and net change in cash (NC). Use NA to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) b. Prepare the stockholders’ equity section of the balance sheet at the end of 2014.

Answer 1

oncord Corporation Cash (1600027) Common stock( 16000 18) Additioanl paid up capital CS 432000 288000 144000 Cash (6200 56) Preferred stock ( 6200 54) Additioanl paid up capital-PS 347200 334800 12400 Cash dividend ( 6200 * 54 * 7%) / Retained earnings Cash 23436 23436 Retained Earnings ( 16000 * 36 * 5 % ) Common stock dividend distributable ( 16000 * 18 * 5 % ) Additioanl paid up capital CS 28800 14400 14400 Common stock dividend distributable ( 16000 * 18 * 5 % ) Common stock 14400 14400 No entry is passed for stock split. It will only change the No. of shares and the par value New no. of shares 168002 33600 and Par value 18/2 $9 Cash Revenues earned 254800 254800 Operating exp Cash 137500 137500 Note:Since the format was not available, therefore, the question has been solved using this format. Journal entries are passed for better understanding purpose

Balance Sheet shareholder's section Stockholder's equity Event Assets ( cash ) = Liabilities + PS + CS + PIC ( CS ) + PIC ( PS ) + RE Account title for RE Cash flow Shareholder's equity FA FA FA NA NA OA OA CS-$9 par, issued 33600 shares PS-$54 par, issued 6200 shares Paid in capital in excess of par (CS) 1,58,400.00 Paid in capital in excess of par (PS12,400.00 Retained Earnings Total Sharehoders's Equity 432000 347200 23436 288000 144000 3,02,400.00 3,34,800.00 334800 12400 23436 Dividend paid 28800 Stock dividend No entry 254800 Revenues earned 137500 Operating exp 14400 14400 65,064.00 8,73,064.00 254800 137500 873064 Total 334800 302400 158400 1240065064