Midwest Corp. completed the following transactions in 2012, the first year of operation. 1. Issued 20,000 shares

Question:

Midwest Corp. completed the following transactions in 2012, the first year of operation.

1. Issued 20,000 shares of $10 par common stock at par.

2. Issued 2,000 shares of $30 stated value preferred stock at $32 per share.

3. Purchased 500 shares of common stock as treasury stock for $15 per share.

4. Declared a 5 percent dividend on preferred stock.

5. Sold 300 shares of treasury stock for $18 per share.

6. Paid the cash dividend on preferred stock that was declared in Event 4.

7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.

8. Appropriated $6,000 of retained earnings.

Required

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

b. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2012.

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