Stockholders Equity: Transactions and Balance Sheet Presentation

The stockholders equity accounts of Windham Corporation at January 1 appear below:

8 Percent preferred stock, $28 par value, 50,000 shares authorized; 6,800 shares issued and outstanding $190,400 Common stock, $10 par value, 200,000 shares authorized; 50,000 shares issued and outstanding 500,000 Paid-in capital in excess of par value-Preferred stock 68,000 Paid-in capital in excess of par value-Common stock 200,000 Retained earnings 270,000

During the year, the following transactions occurred:

Jan. 10 Issued 28,000 shares of common stock for $20 cash per share. 23 Purchased 8,000 shares of common stock as treasury stock at $22 per share. Mar. 14 Sold one-half of the treasury shares acquired January 23 for $24 per share. July 15 Issued 3,200 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Nov. 15 Sold 1,000 of the treasury shares acquired January 23 for $27 per share. Dec. 31 Closed the net income of $59,000 to the Retained Earnings account.

Required

a. Set up T-accounts for the stockholders equity accounts as of the beginning of the year and enter the January 1 balances.

HINT: Complete part b. below prior to entering T-account data.

Cash Jan.10 Answer Answer Jan.23 Answer Answer Mar.14 Answer Answer Nov.15 Answer Answer Bal Answer Answer

Preferred Stock Beg. Answer Answer Jul.15 Answer Answer Bal. Answer Answer

Common Stock Beg. Answer Answer Jan.10 Answer Answer Bal Answer Answer

Equipment Jul.15 Answer Answer Bal Answer Answer

Paid-in-Capital in Excess of Par Value - Preferred Stock Beg. Answer Answer Jul.15 Answer Answer Bal Answer Answer

Paid-in-Capital in Excess of Par Value - Common Stock Beg. Answer Answer Jan.10 Answer Answer Bal. Answer Answer

Paid-in-Capital from Treasury Stock Mar.14 Answer Answer Nov.15 Answer Answer Bal. Answer Answer

Treasury Stock Jan.23 Answer Answer Mar.14 Answer Answer Nov.15 Answer Answer Bal. Answer Answer

Retained Earnings Bal. Answer Answer Dec.31 Answer Answer Bal. Answer Answer

b. Prepare journal entries to record the foregoing transactions and post to T-accounts (set up any additional T-accounts needed). Do not prepare the journal entry for the Dec. 31 transaction, but post the appropriate amount to the Retained Earnings T-account. Determine the ending balances for the stockholders equity accounts.

General Journal Date Description Debit Credit Jan.10 Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common $Answer $Answer Common Stock Answer Answer Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Issued common stock. Jan.23 Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Purchased treasury stock. Mar.14 Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Treasury Stock - Common Answer Answer Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Sold treasury stock. Jul.15 Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Paid-in-Capital in Excess of Par Value - Preferred Stock Answer Answer Issued preferred stock for equipment. Nov.15 Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer Treasury Stock - Common Answer Answer Answer Cash Common Stock Equipment Paid-in-Capital from Treasury Stock Paid-in-Capital in Excess of Par Value - Common Stock Paid-in-Capital in Excess of Par Value - Preferred Stock Preferred Stock Treasury Stock - Common Answer Answer To record sale of treasury stock.

c. Prepare the December 31 stockholders equity section of the balance sheet.

Do not use negative signs with your answers.

Stockholders' Equity Paid in Capital Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital $Answer Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital Answer $Answer Additional Paid-in-Capital Paid-in-Capital in Excess of Par value - Preferred Stock Answer Paid-in-Capital in Excess of Par value - Common Stock Answer Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital Paid-in-Capital from Treasury Stock Less: Treasury Stock - Common Answer Answer Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital Answer Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital Answer Answer Less: Treasury Stock-Common Answer Answer Preferred Stock Common Stock Retained Earnings Total Stockholders' Equity Total Paid-in-Capital $Answer