Requirement 1

January 2, 2021	Debit	Credit
Cash (110,000 x $70)	7,700,000
Common Stock (110,000 x $1)		110,000
Additional Paid-in Capital (difference)		7,590,000
(Issue common stock above par)
February 14, 2021
Cash (60,000 x $12)	720,000
Preferred Stock (60,000 x $10)		600,000
Additional Paid-in Capital (difference)		120,000
(Issue preferred stock above par)
May 8, 2021
Treasury Stock (11,000 shares x $60)	660,000
Cash		660,000
(Purchase treasury stock)
May 31, 2021
Cash (5,500 shares x $65)	357,500
Treasury Stock (5,500 shares x $60)		330,000
Additional Paid-in Capital (5,500 shares x $5)		27,500
(Resell treasury stock above cost)
December 1, 2021
Dividends [(104,500 shares x $0.25) + $36,000]	62,125
Dividends Payable		62,125
(Declare cash dividends)
December 30, 2021
Dividends Payable	62,125
Cash		62,125
(Pay cash dividends)

 

Requirement 2

Major League Apparel Balance Sheet (Stockholders’ Equity Section) December 31, 2021
	Stockholders’ equity:
	Preferred stock, $10 par value	$ 600,000
	Common stock, $1 par value	110,000
	Additional paid-in capital	7,737,500
	Total paid-in capital	8,447,500
	Retained earnings	427,875*
	Treasury stock, 5,500 shares	(330,000)
	Total stockholders’ equity	$8,545,375

*$490,000 net income – $62,125 in dividends