Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

B4 Record share activities (12 marks) Quick Fix-It Corporation was organized at the beginning of this year to operate several car repair businesses in a

B4 Record share activities (12 marks)

Quick Fix-It Corporation was organized at the beginning of this year to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following stock: Common stock, $10 par value, 98,000 shares authorized Preferred stock, $50 par value, 8 percent, 59,000 shares authorized

During January and February of this year, the following stock transactions were completed: a. Sold 78,000 shares of common stock at $20 cash per share. b. Sold 20,000 shares of preferred stock at $80 cash per share. c. Bought 4,000 shares of common stock from a current stockholder for $20 cash per share. Required:

Net income for the year was $210,000; cash dividends declared and paid at year-end were $100,000.

  1. Record the journal entries of transaction a, b, c, dividends declaration and dividend payment. (10

    marks)

  2. Calculate the dividends allocated to the preferred stockholders and common stockholders. (Hint:

    Use the par value of the preferred stock to calculate the dividend allocated to the preferred stockholders.) (2 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: John Hoggett, Lew Edwards, John Medlin

6th Edition

0470806583, 978-0470806586

More Books

Students also viewed these Accounting questions

Question

Understand developments in knowledge creation and management

Answered: 1 week ago

Question

Explain key ideas of workplace learning

Answered: 1 week ago

Question

Explain how HRD may be implemented

Answered: 1 week ago