Problem:
Journalize and post transactions; prepare stockholders' equity section; compute book value.
The stockholders' equity accounts of Pedro Corporation on January 1, 2002, were ar follows:
Preferred stock (10%, $100 par noncumulative, 5,000 shares authorized) $300,000
Common stock($5 stated value, 300,000 shares authorized) 1,000,000
Paid-in capital in excess of par value- P/S 15,000
Paid-in capital in excess of par value - C/S 400,000
Retained earnings 488,000
Treasury stock (5,000 shares) 40,000
During 2002, the corporation had the following transactions and events pertaining to its stockholders' equity:
Feb1 Issued 4,000 shares of common stock for $250,000.
March 20 Purchased 1,000 additional shares of common treasury stock at $8 per share
Jun 14 Sold 4,000 shares of treasury stock - common for $34,000.
Sept 3 Issued 2,000 shares of common stock for a patent valued at $13,000.
Dec 31 Determined that net income for the year was $215,000.
Instructions:
Q1. Journalize the transactions and the closing entry for net income.
Q2. Enter the beginning balances in the accounts and post the journal entries to the stockholders Equity.
Q3. Prepare a stockholders' equity section of the balance sheet at December 31, 2002.
Q4. Compute the book value per share of common stock at December 31, 2002, assuming the preferred stock does not have a call price.