Stockholders Equity: Transactions and Balance Sheet Presentation

The stockholders equity accounts of Cooper Corporation at January 1 follow:

Common stock, $1 par value, 350,000 shares authorized;
150,000 shares issued and outstanding	$150,000
Paid-in capital in excess of par value (common stock)	600,000
Retained earnings	366,000

During the year, the following transactions occurred:

Jan.	5	Issued 20,000 shares of common stock for $15 cash per share.
	18	Purchased 4,000 shares of common stock as treasury stock at $14 cash per share.
Mar.	12	Sold one-fourth of the treasury shares acquired January 18 for $17 per share.
July	17	Sold 600 shares of the remaining treasury stock for $12 per share.
Oct.	1	Issued 5,000 shares of eight percent, $25 par value preferred stock for $35 cash per share.
		These are the first preferred shares issued out of 50,000 authorized shares.
Dec.	31	Closed the net income of $170,000 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.05	Answer	Answer
Jan.18	Answer	Answer
Mar.12	Answer	Answer
Jul.17	Answer	Answer
Oct.01	Answer	Answer

Preferred Stock
Oct.01	Answer	Answer
Bal.	Answer	Answer

Common Stock
Beg.	Answer	Answer
Jan.05	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital in Excess of Par Value - Preferred Stock
Oct.01	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital in Excess of Par Value - Common Stock
Beg.	Answer	Answer
Jan.5	Answer	Answer
Bal	Answer	Answer

Paid-in-Capital from Treasury Stock
Mar.12	Answer	Answer
Jul.17	Answer	Answer
Bal.	Answer	Answer

Treasury Stock
Jan.18	Answer	Answer
Mar.12	Answer	Answer
Jul.17	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.05	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Common Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Issued common stock.
Jan.18	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Purchased treasury stock.
Mar.12	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Treasury Stock - Common	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Sold treasury stock.
Jul.17	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Paid-in-Capital from Treasury Stock	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	To record sale of treasury stock.
Oct.01	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	AnswerCashCommon StockEquipmentPaid-in-Capital from Treasury StockPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred StockTreasury Stock Common	Answer	Answer
	Paid-in-Capital in Excess of Par Value - Preferred Stock	Answer	Answer
	To record issue of preferred 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
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalLess: Treasury Stock - Common	Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalPaid-in-Capital from Treasury StockLess: Treasury Stock - Common	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
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalPaid-in-Capital from Treasury StockLess: Treasury Stock - Common	Answer	Answer
	Total Paid-in-Capital		Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalPaid-in-Capital from Treasury StockLess: Treasury Stock - Common		Answer
			Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalPaid-in-Capital from Treasury StockLess: Treasury Stock - Common		Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-CapitalPaid-in-Capital from Treasury StockLess: Treasury Stock - Common		Answer