Question

Exercise 15-18 Buffalo Company reported the following amounts in the stockholders' equity section of its December 31, 2016, balance sheet. Preferred stock, 9%, $100 par (10,000 shares authorized, 1,900 shares issued) $190,000 Common stock, $5 par (108,500 shares authorized, 21,700 shares issued) 108,500 Additional paid-in capital 116,000 Retained earnings 424,000 $838,500 Total During 2017, Buffalo took part in the following transactions concerning stockholders' equity 1. Paid the annual 2016 $9 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016 2. Purchased 1,600 shares of its own outstanding common stock for $39 per share. Buffalo uses the cost method 3. Reissued 800 treasury shares for land valued at $31,600. 4. Issued 460 shares of preferred stock at $103 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $42 per share. 6. Issued the stock dividend 7. Declared the annual 2017 $9 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018 Prepare journal entries to record the transactions described 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.)

Answer 1

stock. I @ Journal entries. Date I particular Debol Crodel 1. Dividend payable-Preferred f 17100 Devidend payable- Comenon 43400 - Cash $ 60500 R. Treasury stock 462400 C Cash 18 62 400 3. hand $ 31,600 G Treasuny stock $31200 Poid-in from Trequay - 400 Cash $ 47380 Preferred stock $ 46000 Paid. in capital in 1$ 1380 Excess of par-Preferened. Retained Earnings, .\$87780 Commons lock divideo a distributable - $ 10450 Poid-in capital in excess - $ 77330 of pare - common 6, Common Stock çevident 1810450 distributable Common stack. $ 10450 7. Retained earnings.. 19 672201 Devidend payable, Preferred F21240 Dividend payable- common 19 45980 -

frplanchons : . 1. Dividend payable - Preferred - (1900 x $9) 3 $17100 Dividend payable. Commons D (21700 XP 2) = '$43400 a. Treasiny slock - ( 1600 X $39) --4.62,400 3. Treces uny stock - (800X $39) - $31200 Pard-in from Trecesuny stock (31600 - $31200) s'$400 Hi Cash =(460x9 103) - $ 47380 1. Preferred stack = 6460% $10,0) Paid-in capital in excess of pare preferred 2 460 X (103 - $100)] 27460 X$3) 581380 5. Retained earnings : ( 2090*X $427. =$87780 Commonstock deridend disfrabelable (2090 X $ 5) = {10450 *(21700. - 1600 +800 ) - 80900 ( 20900 7.1066) 2090 $ 46000;

Paid in capital in excess of pan- common -[2040 x[942 -- 35)] . (2090 x $37) z $ 77330 7. Devidend payable - common = [(20900 + 2090) * $a] (3 2440 xa) 45980 Devidend payable - Preferred -[(1900 + 460) x893 2 (2360 X89) > 429240 _BUFFALO COMPANY stockholders' Equity - Dee. 31.2017" Capital stock Preferred stack Common stock Total capital stock 3 354950 Additional paid in capital 97195390 ] Totalpais. in capite 11(550060 tRetained Earnings ] ! 585000 Total paid in capital and Relained earnings, [1135060] en los tof treasuwy stock $1 31200 Total stock holoferee lequely 011103,860 836 000 fc118950)

Explanations ? 1 * Preferred stack -($190,000+ $46000) 236000 * common stock -($108,500 + $ 10450) 78118950 * Addidional paid-in-capital 1.48116000+ $400+ $1380 7877330) $ 195110 * Retained earrings ($ 424000-$8778086722078316000) - $ 585000 * Trecesury stack f{6a 400 - $34200) • $31200