Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Scott Corporation at January 1 follow Common stock, $1 par value, 350,000 shares authorized; 50,000 shares issued and outstanding $150,000 Paid-in capital in excess of par value (common stock)600,000 346,000 Retained earnings During the year, the following transactions occurred: 5 Issued 10,000 shares of common stock for $15 cash per share. Jan. Purchased 4,000 shares of common stock as treasury stock at $14 cash per share. 18 Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $17 per share. uly 17 Sold 600 shares of the remaining treasury stock for $13 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. Closed the net income of $85,000 to the Retained Earnings account. Dec. 31 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. HINT: Complete part b. below prior to entering T-account data. Cash Jan.05 Jan.18 Mar.12 Jul.17 Oct.01 Bal Preferred Stock Oct.01 Bal Common Stock Beg. Jan.05 Bal Paid-in-Capital in Excess of Par Value - Preferred Stock Oct.01 Bal Paid-in-Capital in Excess of Par Value Common Stock an Bal Paid-in-Capital from Treasury Stock Mar.12 Jul.17 Bal Treasury Stock Jan.18 Mar.12 Jul.17 Bal Retained Earnings Bal 0 X Dec.31 Bal 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 Debit Credit Description Date Jan.05 Cash Common Stock Paid-in-Capital in Excess of Par Value-Common Stock Issued common stock Jan.18Treasury Stock-Common Cash Purchased treasury stock. Mar.12 Cash Treasury Stock - Common Paid-in-Capital from Treasury Stock Sold treasury stock. Jul.17 Cash Paid-in-Capital from Treasury Stock Preferred Stock To record sale of treasury stock. Oct.01 Cash Equipment Paid-in-Capital in Excess of Par Value Preferred Stock 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 Retained Earnings Retained Earnings Additional Paid-in-Capital 0 X Paid-in-Capital in Excess of Par value - Preferred Stock Paid-in-Capital in Excess of Par value Common Stock Common Stock Total Paid-in-Capital Retained Earnings Common Stock + X Retained Earnings Check
