Problem - On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,200 shares of $103 par value, 8% cumulative and nonparticipating preferred stock, and 53,800 shares of $11 par value common stock. It then completed these transactions.
Jan. 11 Issued 20,490 shares of common stock at $17 per share.
Feb. 1 Issued to Sanchez Corp. 4,500 shares of preferred stock for the following assets: equipment with a fair value of $59,700; a factory building with a fair value of $166,100; and land with an appraised value of $326,700.
July 29 Purchased 1,990 shares of common stock at $19 per share. (Use cost method.)
Aug. 10 Sold the 1,990 treasury shares at $15 per share.
Dec. 31 Declared a $0.35 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31 Closed the Income Summary account. There was a $175,820 net income.
(a) Record the journal entries for the transactions listed above.
(b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2012.