Question: Pringle Corporation has been authorized to issue 22,500 shares of $100 par value, 9%, noncumulative preferred stock and 1,017,100 shares of no-par common stock.
The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders' equity.
|
Preferred Stock
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$146,800
|
|
Paid-in Capital in Excess of Par Value-Preferred Stock
|
22,340
|
|
Common Stock
|
2,040,000
|
|
Paid-in Capital in Excess of Stated Value-Common Stock
|
1,511,000
|
|
Treasury Stock- (5,000 common shares)
|
45,000
|
|
Retained Earnings
|
81,000
|
The preferred stock was issued for $169,140 cash. All common stock issued was for cash. In November 5,000 shares of common stock were purchased for the treasury at a per share cost of $9. No dividends were declared in 2014.
Required:
Question 1: Prepare the journal entries for the following.
(i) Issuance of preferred stock for cash.
(ii) Issuance of common stock for cash.
(iii) Purchase of common treasury stock for cash.
Question 2: Prepare the stockholders' equity section of the balance sheet at December 31, 2014.
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