Flesher Corporation was authorized to issue 100,000 shares of $5 par common stock and 50,000 shares of

Question:

Flesher Corporation was authorized to issue 100,000 shares of $5 par common stock and 50,000 shares of $50 par, 5 percent, cumulative preferred stock. Flesher Corporation completed the following transactions during its first two years of operation.

2010

Jan.2 Issued 15,000 shares of $5 par common stock for $8 per share.

15 Issued 2,000 shares of $50 par preferred stock for $55 per share.

Feb.14 Issued 20,000 shares of $5 par common stock for $9 per share.

Dec. 31 During the year, earned $310,000 of cash service revenue and paid $240,000 of cash operating expenses.

31 Declared the cash dividend on outstanding shares of preferred stock for 2010. The dividend will be paid on January 31 to stockholders of record on January 15, 2011.

2011

Jan. 31 Paid the cash dividend declared on December 31, 2010.

Mar. 1 Issued 3,000 shares of $50 par preferred stock for $60 per share.

June 1 Purchased 500 shares of common stock as treasury stock at $9 per share.

Dec. 31 During the year, earned $250,000 of cash service revenue and paid $175,000 of cash operating expenses.

31 Declared the dividend on the preferred stock and a $0.50 per share dividend on the common stock.

Required

a. Organize the transaction data in accounts under an accounting equation.

b. Prepare the stockholders’ equity section of the balance sheet at December 31, 2010.

c. Prepare the balance sheet at December 31, 2011.

Common Stock
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