1. ABC Company, Incorporated has 300,000 shares of authorized $1 par value common stock and 50,000 shares of authorized 4%, $3 par value, noncumulative preferred stock. As of June 30, the company has 20,000 shares of common stock issued and outstanding, no preferred stock outstanding, and $50,000 of retained earnings. These balances are reflected in the July 1 beginning balances in the ledger. The company sells children's clothing and toys. It uses the perpetual inventory method. Journalize the following transactions for the month of July and post them to the ledger. July 1 Issued an additional 50,000 shares of $1 par value common stock for a total of $200,000 Issued 40,000 shares of 4%, $3 par value preferred stock in exchange for land with a market value of $20,000 and a building with a market value of $100,000 4 Purchased merchandise inventory on account, $175,000. 10 Purchased office supplies on account, $3,000. 12 Paid advertising expense, $2,000. 15 Declared total cash dividends of $15,000. Remember to figure what is owed to preferred. Declared an 8% common stock dividend when the market value of the stock was $4.50 per share. 20 Paid $37,000 on account for the purchase on January 4. 26 Paid utilities expense, $1,000 31 Paid salaries expense, $10,000. Recorded sales for the month, $200,000. Cash sales were $50,000 and credit sales were $150,000. Total cost of goods sold $65,000. 31 Paid the cash dividend. 31 Distributed the stock dividend. 15 Dec 37