On January 2, 2016, ABC Corporation applied for and was granted, by the Minnesota Secretary of State, incorporation and the right to issue:

5,000 shares of $100 par, 8% cumulative nonparticipating preferred stock

50,000 shares of $1 par common stock

Note: ABCs policy for accounting for treasury stock is to use the cost method.

Using the attached T-account template, prepare the required entries for the following economic events.

1/11/16 Issued 20,000 shares of common stock at $16 per share

2/1/16 Issued to ZZZ Corporation 4,000 shares of preferred stock in exchange for the following assets:

Equipment with a fair value of $50,000

Factory Building with a fair value of $160,000

Land with an appraised value of $270,000

7/29/16 Purchased 1,800 shares of its own common stock at $17 per share

8/10/16 Sold the 1,800 treasury shares at $14 per share

12/31/16 The board of directors declared a $ 0.25 per share cash dividend on the common stock and declared the preferred dividend.

12/31/16 Closed the Income Summary account. The balance in the Income Summary account totaled $175,700 and represented net income.

Prepare the stockholders equity section of the balance sheet of ABC Corporation at 12/31/16.

XYZ Corporations articles of incorporation & charter granted by the Minnesota Secretary of State authorize issuance of

100,000 shares of $10 par common stock

50,000 shares of $50 par 6% preferred stock

Using the attached T-account template, prepare the required entries for the following independent transactions.

Issued 500 shares of common stock in exchange for equipment. The equipment was appraised at $7,100; the sellers book value (cost less accumulated depreciation) was $6,200. The most recent market price of the common stock is $16 per share.

Issued 375 shares of common and 100 shares of preferred for a lump sum of $10,800. The common recently sold for $14 per share and the preferred at $65 per share both in active markets.