a. Set up T-accounts for the stockholders equity accounts as of the beginning of the year and enter the January 1 balances.
b. Prepare journal entries to record the foregoing transactions and post to T-accounts above in part a. Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders equity accounts.
c. Prepare the December 31 stockholders equity section of the balance sheet.
Do not use negative signs with your answers.
Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Willis Corporation at January 1 appear below: 8 Percent preferred stock, $10 par value. 50,000 shares authorized: 6,800 shares issued and outstanding 568,000 Common stock 510 par value 200,000 shares authorized: 50,000 shares issued and outstanding 500,000 Pald-in capital in excess of par value-Preferred stock 68,000 Paid-in capital in excess of par value-Common stock 200,000 Retained earnings 270,000 During the year, the following transactions occurred: Jan. 10 issued 35,000 shares of common stock for $18 cash per share. 23 Purchased 10,000 shares of common stock as treasury stock at $19 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $21 per share. July 15 Issued 3.500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1.000 of the treasury shares acquired January 23 for $24 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account. Required a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. HINT: Complete part b. below prior to entering T-account data. Cash Preferred Stock Common Stock Jan. 10 Jan. 23 Jul. 15 Jan. 10 Mar.14 Bal. Bal Beg, Beg. Equipment Pald-In-Capital in Excess of Par Value - Preferred Stock Bes Pald-In-Capital in Excess of Par Value - Common Stock Beg n.10 Pus Bal Bar Treasury Stock Retained Earning Pald-In-Capital from Treasury Stock Mar 14 Jan 23 Nov.15 Mar 14 Dec 31 Bal. Nou b. Prepare journal entries to record the foregoing transactions and post to T-accounts above in part a. Do not prepare the journal entry for the Dec. 31 transaction but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders equity accounts. General Journal Description Debit Credit Date 2010 Common Stock issued common stock Purchased treasury stock Mar14 Treasury Stock Common Saldur Purchased treasury stock. Mar. 14 Treasury Stock - Common Sold treasury stock. Jul. 15 Paid-in-Capital in Excess of Par Value - Preferred Stock Issued preferred stock for equipment. Nov.15 Treasury Stock - Common To record sale of treasury stock. C. Prepare the December 31 stockholders' equity section of the balance sheet. Do not use negative signs with your answers. Stockholders' Equity Paid in Capital Additional Paid-in-Capital Paid-in-Capital in Excess of Par value - Preferred Stock Paid-in-Capital in Excess of Par value - Common Stock Less: Treasury Stock-Common
