Question

The following information applies to the questions displayed below) National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders' equity during 2018, National League's first year of operations: February 2 Issue 11 million shares of common stock for $26 per share. February 4 Issue 510,000 shares of preferred stock for $23 per share. June 15 Repurchase 110,000 shares of its own common stock for $21 per share. August 15 Reissue 82,500 shares of treasury stock for $36 per share. November 1 Declare a cash dividend on its common stock of $110 per share and a $408,000 (4% 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.) November 30 Pay the dividends declared on November 1. Required information 1.25 points Required: 1. Record each of these transactions (if no entry is required for at onlevent, select "No journal entry required in the first account field.) View transaction ist Journal entry worksheet SAMSUNG

Answer 1

Answer:

1)

Date	General Journal	Debit ($)	Credit ($)
Feb 2	Cash (1,100,000 * $26)	$28,600,000
	Common Stock (1,100,000 * $5)		$5,500,000
	Additional Paid in Capital		$23,100,000
Feb 4	Cash (510,000* $23)	$11,730,000
	Preferred stock (510,000 * $20)		$10,200,000
	Additional Paid in capital		$1,530,000
Jun 15	Treasury Stock (110,000*$21)	$2,310,000
	Cash		$2,310,000
Aug 15	Cash (82,500 * $36)	$2,970,000
	Treasury Stock (82,500 * $21)		$1,732,500
	Additional Paid in Capital		$1,237,500
Nov 1	Dividends	$1,618,000
	Dividend Payable - Common Stock (1,100,000 * $1.10)		$1,210,000
	Dividend Payable - Preferred Stock (510,000*$20*4%)		$408,000
Nov 30	Dividend Payable - Common Stock	$1,210,000
	Dividend Payable - Preferred Stock	$408,000
	Cash		$1,618,000

2.)

NATIONAL LEAGUE GEAR
Stockholder's equity section
For the year ended December 31, 2018
Description	Amount ($)
Stockholders Equity:
Preferred Stock $20 par value	10,200,000
Common Stock $5 par value	5,500,000
Additional paid in capital	25,867,500
Total paid in capital	41,567,500
Retained earnings	3,192,000
Treasury Stock	(1,732,500)
Total Stockholder's equity	43,027,000

Working Notes:

Additional paid in capital = $23100000+$1530000+$1237500= $25867500
Retained Earnings = $4810000-$1618000= $3192000