The Primo Corporation began operations two years ago and was authorized to issue 500,000 shares of 6%, $100 par value preferred stock and 2,000,000 shares of $5 par value common stock.The following transactions and events were completed during 2014. (Note: at the beginning of 2014 there are 1,000 shares of preferred stock and 500,000 shares of common stock)

Jan.1Issued an additional 40,000 shares of preferred stock for cash at $108 per share. Feb.2Issued an additional 300,000 shares of common stock for cash at $10 per share. Mar.3Declared a cash dividend on the preferred stock $123,000. Apr.4Discovered a $60,000 understatement of 2012 depreciation. May5Paid the cash dividend declared of March 3. June6Issued 4,000 shares of common stock for land that was advertised for sale at $45,000. The stock market price of the stock is $10 per share. Sept.9Primo purchased 4,500 shares of its own common stock at $13 per share. Oct.10Sold 3,000 shares of treasury stock for $14 per share Nov. 11Declared a $1 cash dividend per share on common stock. (hint: compute the total number of shares of common stock outstanding.) Dec.31Determined that net income for the year was $1,750,000.

Instructions (a)Journalize the transactions listed above. (b)Post only the stockholder?s equity accounts. (c)Prepare a retained earnings statement for the year. (d)Prepare a stockholders? equity section at December 31, 2014.

Name Section Date Problem 11 (a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 29 30 31 32 33 34 35 36 37 38 39 40 General Journal Date Jan. 1 Feb. 2 Mar. 3 Apr. 4 May 5 June 6 Sept. 9 Oct. 10 Nov. 11 Dec. 31 Account Titles J5 Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 29 30 31 32 33 34 35 36 37 38 39 40 Name Section Date Problem 11 Continued (b) Preferred Stock Date Explanation 1/1/2015 Balance Ref. Debit Credit Balance 200,000 (2,000 shares) Ref. Debit Credit Balance 4,200,000 (600,000 shares) Debit Credit Balance 60,000 Common Stock Date Explanation 1/1/2015 Balance Paid-in Capital in Excess of Par Value - Preferred Stock Date 1/1/2015 Explanation Ref. Paid-in Capital in Excess of Par Value-Common Stock Date 1/1/2015 Retained Earnings Date 1/1/2015 Treasury Stock Date Explanation Ref. Debit Credit Balance 1,000,000 Explanation Ref. Debit Credit Balance 3,450,000 Explanation Ref. Debit Credit Balance Paid-in Capital from Treasury Stock Name Section Date Problem 11 Continued (PART C below) (b) Cash Dividends-Preferred Stock Date Explanation Ref. Debit Credit Balance Ref. Debit Credit Balance Cash Dividends-Common Stock Date Explanation Name Section Date Problem 11 Concluded (d) Kroger Corporation Balance Sheet (partial) December 31, 2015 1 Stockholders' equity 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40