Choctaw Co. completed the following transactions in Year 1, the first year of operation. 1. Issued 20,000

Question:

Choctaw Co. completed the following transactions in Year 1, the first year of operation.
1. Issued 20,000 shares of $10 par common stock for $10 per share.
2. Issued 3,000 shares of $20 stated value preferred stock for $20 per share.
3. Purchased 1,000 shares of common stock as treasury stock for $12 per share.
4. Declared a $2,000 cash dividend on preferred stock.
5. Sold 500 shares of treasury stock for $14 per share.
6. Paid $2,000 cash for the preferred dividend declared in Event 4.
7. Earned cash revenues of $78,000 and incurred cash expenses of $41,000.
8. Appropriated $8,000 of retained earnings.

Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare a balance sheet as of December 31, Year 1.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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