Problem I. The December 31, 2016, the equity section of the balance sheet of Springer Company included the following:
Common Stock $1 Par 20 million shares outstanding $20,000,000
Paid in Capital in Excess of Par 100,000,000
Retained Earnings 115,000,000
Springer completed the following transactions in 2016 relating to treasury stock:
March 17: Reacquired 5 million shares at $10.
May 17: Reacquired 3 million shares at $9.
August 10: Sold 6 million shares at $12.
Required:
a. Assuming Springer uses the cost method, prepare journal entries to record the foregoing transactions on a FIFO basis.
b. Prepare the stockholders' equity section at August 31.
Problem II. The shareholders' equity section of Crystal Company's balance sheet includes the items shown below.
Preferred stock, 6%, $100 par, 1,000,000 shares outstanding
Common stock, $1 par, 50,000,000 shares outstanding
The board of directors of Crystal declared cash dividends of $3 million, $6 million, and $50 million in each of its first 3 years of operation: 2013, 2014, 2015, respectively.
Required: Prepare a schedule showing the distribution of dividends by amount and per share of preferred and common stock for each of the three years. The preferred stock is cumulative and nonparticipating.