Question
Sudan Enterprises Inc. reported the following shareholders equity at December 31, 2019: Contributed Capital Preferred shares, $ 1, no par value, 100,000 shares authorized, cumulative,
Sudan Enterprises Inc. reported the following shareholders equity at December 31, 2019:
Contributed Capital
Preferred shares, $ 1, no par value, 100,000 shares authorized, cumulative,
callable at $ 107 plus dividends in arrears;
issued and outstanding, 20,000 shares........................................................... $ 2,040,000
Common shares, no par, 100,000 shares authorized,
80,000 issued and outstanding....................................................................... 640,000
Contributed surplus (retirement of common shares).............................................. 120,000
Retained earnings................................................................................................. 1,600,000
The following transactions took place in 2020:
Jan 20.... Redeemed 1,000 preferred shares at the call price. There were no dividends in arrears.
Jan 28.... Declared $ 100,000 in dividends. Use separate accounts for each class of dividends.
Feb 28.... Retired 8,000 common shares at $ 12 per share.
Mar 2..... Declared and distributed a 3% common stock dividend. The market value of the shares at that time was $ 11.50.
Instructions
Prepare journal entries for the 2020 transactions.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started