Recording and reporting treasury stock transactions
One Co. completed the following transactions in 2011. the first year of operation:
1. Issued 20,000 shares of S5 par common stock for $5 per share.
2. Issued 1,000 shares of $20 stated value preferred stock for $20 per share.
3. Purchased 1,000 shares of common stock as treasury stock for $7 per share.
4. Declared a $1,500 cash dividend on preferred stock.
5. Sold 500 shares of treasury stock for $10 per share.
6. Paid $1,500 cash for the preferred dividend declared in Event 4.
7. Earned cash revenues of $54,000 and incurred cash expenses of $32,000.
8. Closed revenue, expense, and dividend accounts to the retained earnings account.
9.Appropriated $5,000 of retained earnings.
Required
a. Prepare journal entries to record these transactions and post them to T-accounts.
b. Prepare a balance sheet as of December 31, 2011.
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