Question
SarasotaCompany reported the following amounts in the stockholders' equity section of its December 31, 2019, balance sheet. Preferred stock,9%, $100par (10,000 shares authorized,1,800shares issued) $180,000
SarasotaCompany reported the following amounts in the stockholders' equity section of its December 31, 2019, balance sheet.
Preferred stock,9%, $100par (10,000 shares authorized,1,800shares issued) $180,000
Common stock, $5par (101,500shares authorized,20,300shares issued) $101,500
Additional paid-in capital $130,000
Retained earnings $486,000
Total $897,500
During 2020,Sarasotatook part in the following transactions concerning stockholders' equity.
1.Paid the annual 2019 $9per share dividend on preferred stock and a $2per share dividend on common stock. These dividends had been declared on December 31, 2019.
2.Purchased1,800shares of its own outstanding common stock for $41per share.Sarasotauses the cost method.
3.Reissued700treasury shares for land valued at $31,400.
4.Issued510shares of preferred stock at $104per share.
5.Declared a10% stock dividend on the outstanding common stock when the stock is selling for $45per share.
6.Issued the stock dividend.
7.Declared the annual 2020 $9per share dividend on preferred stock and the $2per share dividend on common stock. These dividends are payable in 2021.
Prepare journal entries to record the transactions described above.
Prepare the December 31, 2020, stockholders' equity section. Assume 2020 net income was $333,000.
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