Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise #5: The following is the stockholders' equity of Piesco Corporation on October 1, 201X: Paid-In Capital Preferred 17% Stock, $11 par value, authorized 6,300

Exercise #5:The following is the stockholders' equity of Piesco Corporation on October 1, 201X:

Paid-In Capital

Preferred 17% Stock, $11 par value, authorized 6,300 shares, shares, 3,300 shares issued and outstanding

$36,300

Common Stock, $8 par value, authorized 24,000 shares,

10,000 shares issued and outstanding

80,000

Additional Paid-In Capital

Paid-In Capital in Excess of Par Value - Preferred

$10,000

Paid-In Capital in Excess of Par Value - Common

7,000

Paid-In Capital in Excess of Par Value - Stock Dividend

2,500

Total Additional Paid-In Capital

19,500

Total Paid-In Capital

$135,800

Retained Earnings

180,000

Total Stockholders' Equity

$315,800

Figure 5

Tasks:

  1. Journalize the transactions in general journal form.
  2. Prepare the stockholders' equity section of the balance sheet using the legal capital approach as of December 31, 201X.

The working papers that accompany this text have accounts to update ledger balances. Be sure to put in the beginning balances. Use the Blueprint as a guide to the setup of stockholders' equity.

  • Oct. 3Declared a $0.50 per shared dividend on the common stock and a $1.20 per share dividend on the preferred. (The Dividends Payable account will record amounts for both common and preferred, although companies could set up Common Dividend Payable and Preferred Dividend Payable accounts.)
  • Nov. 15Dividends were paid that were declared on October 3.
  • Nov. 18Purchased 340 shares of its own common stock at $14 per share.
  • Nov. 25Reissued 90 shares at $17 per shared.
  • Nov. 26Declared a 15% stock dividend on common. Market value of stock is $48 per share.
  • Dec. 29Distributed stock dividend declared on November 26.
  • Dec. 30Reissued 80 shares of treasury stock at $12 per share.
  • Dec. 31Closed the Income Summary account, which had net income of $89,000, to Retained Earnings.

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_2

Step: 3

blur-text-image_3

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 Information For Business Decisions

Authors: Loren A Nikolai, Billie Cunningham, John D Bazley

3rd Edition

1111066884, 9781111066888

More Books

Students also viewed these Accounting questions

Question

Why is it important to have a dream? (p. 49)

Answered: 1 week ago

Question

Technology

Answered: 1 week ago

Question

Population

Answered: 1 week ago