Question
Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during
Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during 2018, its first year of operations:
January 2 Issue 110,000 shares of common stock for $67 per share.
February 14 Issue 57,000 shares of preferred stock for $12 per share.
May 8 Repurchase 11,000 shares of its own common stock for $57 per share.
May 31 Reissue 5,500 shares of treasury stock for $62 per share.
December 1 Declare a cash dividend on its common stock of $0.40 per share and a $34,200 (6% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.)
December 30 Pay the cash dividends declared on December 1.
1. Record each of these transactions.
december 1, 2018
debit | credit | |
dividinds | ||
dividins payable |
2. Prepare the stockholders equity section of the balance sheet as of December 31, 2018. Net income for the year was $487,000.
DONNIE HILFIGER Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock Common stock Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equityStep by Step Solution
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