Question 1:
Pringle Corporation has been authorized to issue 24,000 shares of $100 par value, 6%, noncumulative preferred stock and 1,110,500 shares of no-par common stock.
The corporation assigned a $4 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders' equity.
Preferred Stock $167,600
Paid-in Capital in Excess of Par Value-Preferred Stock 21,190
Common Stock 2,150,000
Paid-in Capital in Excess of Stated Value-Common Stock 1,462,000
Treasury Stock- (5,810 common shares) 58,100
Retained Earnings 81,000
The preferred stock was issued for $188,790 cash. All common stock issued was for cash. In November 5,810 shares of common stock were purchased for the treasury at a per share cost of $10. No dividends were declared in 2014.
Prepare the journal entries for the following. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(1) Issuance of preferred stock for cash.
(2) Issuance of common stock for cash.
(3) Purchase of common treasury stock for cash.
Question 2: On January 1, 2014, Everett Corporation had these stockholders' equity accounts.
Common Stock ($10 par value, 70,300 shares issued and outstanding) $703,000
Paid-in Capital in Excess of Par Value 515,500
Retained Earnings 670,100
During the year, the following transactions occurred.
Jan. 15 Declared a $0.70 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb. 15 Paid the dividend declared in January.
Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On
April 15, the market price of the stock was $12 per share.
May 15 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.70 per share cash dividend to stockholders of record on December 15, payable January 10, 2015.
Dec. 31 Determined that net income for the year was $420,600.
Journalize the transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)