Question

On January 5, 2017, Marigold Corporation received a charter granting the right to issue 5,200 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 47,700 shares of $10 par value common stock. It then completed these transactions.

Jan. 11		Issued 21,200 shares of common stock at $16 per share.
Feb. 1		Issued to Sanchez Corp. 4,200 shares of preferred stock for the following assets: equipment with a fair value of $54,900; a factory building with a fair value of $170,000; and land with an appraised value of $252,000.
July 29		Purchased 1,900 shares of common stock at $16 per share. (Use cost method.)
Aug. 10		Sold the 1,900 treasury shares at $15 per share.
Dec. 31		Declared a $0.40 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31		Closed the Income Summary account. There was a $188,100 net income.

Record the journal entries for the transactions listed above. (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. Record entries in the order displayed in the problem statement. Round answers to 0 decimal places, e.g. $5,275.)

Account Titles and Explanation Debit Date Credit Feb. 1 Aug. 10

Prepare the stockholders’ equity section of Marigold Corporation’s balance sheet as of December 31, 2017. (Enter account name only and do not provide descriptive information.)

Answer 1

Answer Account Titles and Explanation Cash (21,200 $16) Debit 339,200 Credit Date Jan 11 Common Stock (21,200 $10) 212,000 127,200 Paid-in Capital in excess of Par- Common Stock Equipment Buildings Land Feb 1 54,900 170,000 252,000 Preferred Stock (4,200 $100) Paid-in Capital in excess of Par- Preferred Stock 420,000 56,900 Treasury Stock (1,900 $16) July 29 30,400 Cash 30,400 Cash (1,900 $15) Retained Earnings (1,900 * $1) Aug 10 28,500 1,900 42,080 188,100 Treasury Stock (1,900 $16) Dividend Payable Retained Earnings 30,400 42,080 188,100 Retained Earnings Dec 31 Dec 31 Income Summarv

Calculation:

Dividend on Preferred Stock:
No. Of Preferred Stock outstanding = 4,200
Dividend per share = $100 * 8% = $8
Dividend on Preferred Stock = 4,200 * $8
Dividend on Preferred Stock = $33,600

Dividend on Common Stock:
No. of Common Stock outstanding = 21,200 – 1,900 + 1,900 = 21,200
Dividend per share = $0.40
Dividend on Common Stock = 21,200 * $0.40
Dividend on Common Stock = $8,480

Total Dividend payable = $33,600 + $8,480
Total Dividend payable = $42,080

MARIGOLD CORPORATION Stockholders' Equity December 31, 2017 Capital Stock Preferred Stock Common Stock Total Capital Stock Additional Paid-in Capital Paid-in Capital in excess of Par- Preferred Stock Paid-in Capital in excess of Par- Common Stock Total Additional Paid-in Capital Total Paid-in Capital Retaind Earnings Total Stockholders' quity 420,000 212,000 632,000 56,900 127,200 184,100 816,100 144,120 960,220