OBJ. 3, 4, 6 The following selected accounts appear in the ledger of Upscale Construction Inc. at the beginning of the current year: Preferred 2% Stock, $80 par (200,000 shares authorized, 65,000 shares issued) Paid-In Capital in Excess of Par-Preferred Stock 5,200,000 360,000 Common Stock, $12 par (3,000,000 shares authorized, 1,400,000 shares issued) 16,800,000 Paid-In Capital in Excess of Par-Common Stock 1,290,000 Retained Earnings 110,900,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Issued 220,000 shares of common stock at $15, receiving cash. b. Issued 6,000 shares of preferred 2% stock at $94. C. Purchased 130,000 shares of treasury common for $19 per share. d. Sold 70,000 shares of treasury common for $23 per share. e. Sold 40,000 shares of treasury common for $17 per share. f. Declared cash dividends of $1.60 per share on preferred stock and $0.14 per share on common stock. g. Paid the cash dividends. INSTRUCTIONS Journalize the entries to record the transactions. Identify each entry by letter. SHOW ANSWER 1 A B C General Journal D E 2 3 Date Description 4 5 January 5 Cash 6 7 Common Stock Paid-in Capital in Excess of Par - Common Stock Post Ref Debit Credit Page 1 3,300,000 2,640,000 660,000 8 9 February 10 Cash 564,000 10 Preferred Stock 480,000 11 Paid-in Capital in Excess of Par - Preferred Stock 84,000 12 13 March 19 Treasury Stock 2,470,000 14 Cash 2,470,000 15 16 May 16 Cash 1,610,000 17 18 | Paid-in Capital from Sale of Treasury Stock Treasury Stock 280,000 1,330,000 19 20 August 25 Cash 680,000 21 22 Paid-in Capital from Sale of Treasury Stock Treasury Stock 80,000 760,000 23 24 December 6 Preferred Dividend 337,600 25 Common Dividend 224,000 26 Dividend Payable 113,600 27 28 December 31 Dividend Payable - Common Stock 224,000 29 Dividend Payable - Preferred Stock 113,600 30 Cash 337,600 31 32 33 B5 1 2 A B 3 fx Beginning of Year D E Outstanding Outstanding Shares of Pref Shares of 4 Stock Common Stock 5 Beginning of Year 6 a 7 b 8 C 9 d 10 e 11 12 13 # of Shares Cash Dividends per share Dividends Paid in (f) 14 15 16 17 18 19 20 21