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Choctaw Co. completed the following transactions in Year 1, the first year of operation. 1. Issued...

Choctaw Co. completed the following transactions in Year 1, the first year of operation.

1. Issued 35,000 shares of $10 par common stock for $10 per share.

2. Issued 4,500 shares of $20 stated value preferred stock for $20 per share.

3. Purchased 2,500 shares of common stock as treasury stock for $12 per share.

4. Declared a $3,500 cash dividend on preferred stock.

5. Sold 1,200 shares of treasury stock for $14 per share.

6. Paid $3,500 cash for the preferred dividend declared in Event 4.

7. Earned cash revenues of $108,000 and incurred cash expenses of $56,000.

8. Appropriated $9,500 of retained earnings.

Required:

a. Organize the transaction in accounts under an accounting equation.

b. Prepare a balance sheet as of December 31, Year 1.  Required A Required B  Complete this question by entering your answers in the tabs below. Organize the transaction in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Select "NA" if there is no effect on the "A Earnings".)

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Answer #1

A.

Choctaw Co.
Accounting Equation for the Year 1
Event Assets = Liabilities Stockholders' Equity Accounting Title Retained Earnings
Cash = Dividends
Payable		 + Preferred
Stock		 + Common Stock + Paid-in Capital In Excess Treasury Stock - Treasury Stock + Retained Earnings + Appropriated Retained Earnings
1 350000 = + + 350000 + - + + NA
2 90000 = + 90000 + + - + + NA
3 -30000 = + + + - 30000 + + NA
4 = 3500 + + + - + -3500 + Dividends
5 16800 = + + + 2400 - -14400 + + NA
6 -3500 = -3500 + + + - + + NA
7a. 108000 = + + + - + 108000 + Revenues
7b. -56000 = + + + - + -56000 + Expenses
8 = + + + - + -9500 + 9500 Appropriated retained earnings
Totals 475300 = 0 + 90000 + 350000 + 2400 - 15600 + 39000 + 9500

B.

CHOCTAW CO.
As of December 31, Year 1
Stockholders' equity
Preferred stock 90000
Common stock 350000
Paid-in Capital Treasury stock 2400
Total Paid-In Capital 442400
Retained Earnings
Unappropriated 39000
Appropriated 9500
Total Retained Earnings 48500
Less: Treasury stock -15600
Total Stockholders' Equity 475300
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