problem 1 -7 need help Question 1 (30 Points) On December 31, 2014, Rayco Inc. had the
Question:
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problem 1 -7 need help
Question 1 (30 Points)
On December 31, 2014, Rayco Inc. had the following balances (all balances are normal):
Accounts | Amount |
Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 10,000 shares issued and outstanding) | $1,000,000 |
Common Stock ($10 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) | $1,000,000 |
Paid-in Capital in Excess of par, Common | 150,000 |
Retained Earnings | 700,000 |
The following events occurred during 2014 and were not recorded:
On January 1, Rayco declared a 5% stock dividend on its common stock when the market value of the common stock was $15 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.
On February 15, Rayco reacquired 1,000 shares of common stock for $20 each.
On March 31, Rayco reissued 250 shares of treasury stock for $25 each.
On July 1, Rayco reissued 500 shares of treasury stock for $16 each.
On October 1, Rayco declared full year dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15.
On December 15, Rayco split common stock 2 shares for 1.
Net Income for 2014 was $275,000.
Requirements:
Prepare journal entries for the transactions listed above.
Prepare a Stockholders' section of a classified balance sheet as of December 31, 2014.
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