Question
PART A-Record the following 2018 transctions for the Sears Corporation in the journal. Additional information you will need: when Sears began operations several years ago,
PART A-Record the following 2018 transctions for the Sears Corporation in the journal. Additional information you will need: when Sears began operations several years ago, they were authorized to issue 200,000 shares of 7%, $100 par value preferred stock and 6,000,000 shares of $4 par value common stock.
Jan. | 1 | Issued 500,000 shares of common stock for cash at $11 per share. |
Feb. | 2 | Issued 30,000 shares of preferred stock for cash at $105 per share. |
Mar. | 3 | Declared a cash dividend on the preferred stock $385,000. |
Apr. | 4 | Discovered a $13,000 overstatement of 2015 depreciation. |
May | 5 | Paid the cash dividend declared of March 3. |
June | 6 | Issued 4,000 shares of common stock for land that was advertised for sale at $51,000. The stock market price of the stock is $15 per share. |
Sept. | 9 | Sears purchased 8,000 shares of its own common stock at $14 per share. |
Oct. | 10 | Sold 3,000 shares of treasury stock for $18 per share |
Nov. | 11 | Declared a $0.60 cash dividend per share on common stock for a total of $896,400. |
Dec. | 31 | Record the net income for the year, $950,000. |
PART B. Based on the Sears Corp.partial trial balance below, prepare (a) a retained earnings statement for the year and (b) a stockholders equity section at December 31, 2018. You may need information from A to complete this section.
Sears Corporation
Adjusted Trial Balance-partial
December 31, 2018
|
| Debit |
| Credit |
Preferred Stock....................................................................... Common Stock........................................................................ Paid-in-capital in excess of par value-Preferred...................... Paid-in-capital in excess of par value-Common...................... Retained Earnings................................................................... Cash Dividends-Preferred Stock............................................ Cash Dividends-Common Stock............................................. Treasury Stock (5,000 shares)................................................. Paid-in-capital from Treasury Stock........................................
then adjusted for the prior period adjustment
|
|
385,000 896,400 70,000
|
|
5,500,000 5,976,000 180,000 4,952,000 3,763,000*
12,000
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started