Problem -
Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication Corporation at the beginning of the current fiscal year:
Preferred 2% Stock, $80 par (100,000 shares authorized, 60,000 shares issued) $4,800,000
Paid-In Capital in Excess of Par-Preferred Stock 210,000
Common Stock, $9 par (3,000,000 shares authorized, 1,750,000 shares issued) 15,750,000
Paid-In Capital in Excess of Par-Common Stock 1,400,000
Retained Earnings 52,840,000
During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:
Feb. 2 Purchased 87,500 shares of treasury common for $8 per share.
Mar.16 Sold 55,000 shares of treasury common for $11 per share.
May 7 Issued 20,000 shares of preferred 2% stock at $84.
Jun. 27 Issued 400,000 shares of common stock at $13, receiving cash.
Aug. 30 Sold 18,000 shares of treasury common for $7.50 per share.
Dec. 5 Declared cash dividends of $1.60 per share on preferred stock and $0.05 per share on common stock.
31 Paid the cash dividends.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Diamondback Welding & Fabrication Corporation
ASSETS
- 110Cash
- 120Accounts Receivable
- 131Notes Receivable
- 132Interest Receivable
- 141Merchandise Inventory
- 145Office Supplies
- 151Prepaid Insurance
- 181Land
- 193Equipment
- 194Accumulated Depreciation-Equipment
LIABILITIES
- 210Accounts Payable
- 221Notes Payable
- 226Interest Payable
- 231Cash Dividends Payable
- 236Stock Dividends Distributable
- 241Salaries Payable
- 261Mortgage Note Payable
EQUITY
- 311Common Stock
- 312Paid-In Capital in Excess of Par-Common Stock
- 315Treasury Stock
- 321Preferred Stock
- 322Paid-In Capital in Excess of Par-Preferred Stock
- 331Paid-In Capital from Sale of Treasury Stock
- 340Retained Earnings
- 351Cash Dividends
- 352Stock Dividends
- 390Income Summary
REVENUE
- 410Sales
- 610Interest Revenue
EXPENSES
- 510Cost of Merchandise Sold
- 515Credit Card Expense
- 520Salaries Expense
- 531Advertising Expense
- 532Delivery Expense
- 533Selling Expenses
- 534Rent Expense
- 535Insurance Expense
- 536Office Supplies Expense
- 537Organizational Expenses
- 562Depreciation Expense-Equipment
- 590Miscellaneous Expense
- 710Interest Expense