The following selected items and amounts were taken from the balance sheet of Quale Company as of December 31, 2012:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93,000
Property, plant, and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 850,000
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Preferred stock (7%, $100 par, noncumulative, 10,000 shares
authorized, 5,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000
Common stock ($10 par, 100,000 shares authorized,
80,000 shares issued and outstanding). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000
Paid-in capital in excess of par, preferred stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Paid-in capital in excess of par, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000
Paid-in capital, treasury stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,000
Required:
For each of parts (1) to (5), (a) prepare the necessary journal entry (or entries) to record each transaction, and (b) calculate the amount that would appear on the December 31, 2012, balance sheet as a consequence of this transaction only for the account given. (Note: In your answer to each part of this problem, consider this to be the only transaction that took place during 2012.)
1. Quale issued 200 shares of common stock in exchange for cash of $4,000.
a. Entry
b. Paid-in Capital in Excess of Par, Common Stock
2. Quale issued 200 shares of preferred stock at a price of $102 per share.
a. Entry
b. Paid-in Capital in Excess of Par, Preferred Stock
3. Quale issued 500 shares of common stock in exchange for a building. The common stock is not actively traded, but the building was recently appraised at $11,000.
a. Entry
b. Property, Plant, and Equipment
4. Quale reacquired 1,000 shares of common stock from a stockholder for $23,000 and subsequently reissued the shares to a different investor for $21,500. (Note: Make two entries.)
a. Entries
b. Paid-In Capital, Treasury Stock
5. The board of directors declared dividends of $75,000. This amount includes the current year dividend preference on preferred stock, with the remainder to be paid to common shareholders.
a. Entry
b. Retained Earnings