The shareholders' equity section of Superior Corporation's balance sheet as of December 31, 2015, is as follows:

Shareholders' Equity

Preferred stock, $100 par value; authorized, 300,000 shares; issued, 30,000 shares $3,000,000

Common stock, $5 par value; authorized, 2,000,000 shares; issued, 400,000 shares 2,000,000

Paid-in capital in excess of parpreferred 90,000

Paid-in capital in excess of parcommon 850,000

Retained earnings 3,000,000

$8,940,000

The following events occurred during 2016:

Jan. 5 10,000 shares of authorized and unissued common stock were sold for $8 per share.

16 10,000 shares of authorized and unissued preferred stock were sold for $109 per share.

Apr. 1 80,000 shares of common stock were repurchased for the treasury at a price of $19 per share. Superior uses the cost method to account for treasury stock.

Sept. 1 3,000 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $336,000. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share.

Dec. 1 25,000 shares of treasury stock are reissued at a price of $24 per share.

Required:

1. Prepare journal entries for each of the above transactions.

2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2016.

3. Calculate Superior's legal capital at December 31, 2016.

CHART OF ACCOUNTS

Superior Corporation

General Ledger

ASSETS

111 Cash

121 Accounts Receivable

141 Inventory

152 Prepaid Insurance

180 Land

181 Equipment

189 Accumulated Depreciation

LIABILITIES

211 Accounts Payable

231 Salaries Payable

250 Unearned Revenue

261 Income Taxes Payable

EQUITY

305 Preferred Stock

311 Common Stock

318 Additional Paid-in Capital on Preferred Stock

320 Additional Paid-in Capital on Common Stock

321 Additional Paid-in Capital on Treasury Stock

331 Retained Earnings

335 Treasury Stock

REVENUE

411 Sales Revenue

EXPENSES

500 Cost of Goods Sold

511 Insurance Expense

512 Utilities Expense

521 Salaries Expense

532 Bad Debt Expense

540 Interest Expense

541 Depreciation Expense

559 Miscellaneous Expenses

910 Income Tax Expense