1
Lion Company has two classes of capital
stock outstanding: 7%, $50 par preferred and $1 par common. At December 31, 2017, the following accounts were included in
stockholders equity.
Preferred Stock, 200,000 shares $10,000,000
Common Stock, 5,000,000 shares 5,000,000
Paid-in Capital in Excess of ParPreferred Stock 350,000
Paid-in Capital in Excess of ParCommon Stock 68,700,000
Retained Earnings 12,780,000
The following transactions affected stockholders equity during 2018.
Mar 23 4-for-1 stock split (par value reduced to $0.25).
Apr 1 25,000 shares of common treasury stock purchased at $12 per share. Merriweather uses the cost method.
Jun. 18 50,000 shares of preferred stock issued at $51 per share.
Aug. 18 15,000 shares of treasury stock reissued at $13 per share.
Oct. 1 120,000 shares of common stock issued at $14 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of $0.15 per share is declared.
Dec. 31 Net income is $4,650,000.
Required: Prepare the journal entries for each of the transactions above. If a transaction requires a memo entry, write a brief memo
as to the transaction details and impact.
Prepare a statement of stockholders' equity in good form as of December 31, 2018.