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Stockholders Equity: Transactions and Balance Sheet Presentation The stockholders equity accounts of Windham Corporation at January 1 appear below: 8 Percent preferred stock, $25 par
Stockholders Equity: Transactions and Balance Sheet Presentation
The stockholders equity accounts of Windham Corporation at January 1 appear below:
8 Percent preferred stock, $25 par value, 50,000 shares authorized; | |
6,800 shares issued and outstanding | $170,000 |
Common stock, $10 par value, 200,000 shares authorized; | |
50,000 shares issued and outstanding | 500,000 |
Paid-in capital in excess of par valuePreferred stock | 68,000 |
Paid-in capital in excess of par valueCommon stock | 200,000 |
Retained earnings | 270,000 |
During the year, the following transactions occurred:
Jan. | 10 | Issued 28,000 shares of common stock for $17 cash per share. |
23 | Purchased 8,000 shares of common stock as treasury stock at $19 per share. | |
Mar. | 14 | Sold one-half of the treasury shares acquired January 23 for $21 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 $24 per share. |
Dec. | 31 | Closed the net income of $59,000 to the Retained Earnings account. |
Required
Prepare journal entries to record the foregoing transactions and post to T-accounts. 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.
- Prepare the December 31 stockholders equity section of the balance sheet.
T- ACCOUNTS
\begin{tabular}{|l|l|l|l|} \hline \multicolumn{3}{|c|}{ Cash } \\ \hline Jan.10 & 0 & 0 & \\ \hline Jan.23 & 0 & 0 & \\ \hline Mar.14 & 0 & 0 & \\ \hline Nov.15 & 0 & 0 & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|r|} \hline & \multicolumn{3}{|c|}{ Preferred Stock } \\ \hline Beg. bal & & 170,000 \\ \hline Jul.15 & 0 & 0 \\ \hline Bal. & 0 & 0 & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|r|} \hline \multicolumn{3}{|c|}{ Common Stock } \\ \hline Beg. bal & & 500,000 & \\ \hline Jan.10 & 0 & 0 \\ \hline Bal & 0 & 0 \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{3}{|c|}{ Equipment } \\ \hline Jul.15 & 0 & 0 \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{3}{|c|}{ Paid-in-Capital in Excess of Par Value - } \\ Preferred Stock \\ \hline Beg. bal & & 68,000 \\ \hline Jul.15 & 0 & 0 \\ \hline Bal & 0 & 0 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{l} Paid-in-Capital in Excess of Par Value - \\ Common Stock \end{tabular}} \\ \hline Beg. bal & & 200,000 \\ \hline Jan.10 & 0 & 0x \\ \hline Bal. & 0 & 0x \\ \hline \end{tabular} \begin{tabular}{|l|l|r|} \hline \multicolumn{3}{|c|}{ Paid-in-Capital from Treasury Stock } \\ \hline Mar.14 & 0 & 0 \\ \hline Nov.15 & 0 & 0 \\ \hline Bal. & 0 & 0 \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|} \hline \multicolumn{4}{|c|}{ Treasury Stock } \\ \hline Jan.23 & 0 & 0 & \\ \hline Mar.14 & 0 & 0 & \\ \hline Nov.15 & 0 & 0 & \\ \hline Bal. & 0 & 0 & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{3}{|c|}{ Retained Earnings } \\ \hline Beg. bal & & 270,000 \\ \hline Dec.31 & 0 & 0 \\ \hline Bal. & 0 & 0 \\ \hline \end{tabular}Step by Step Solution
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