Question
The stockholders equity accounts of Castle Corporation on January 1, 2017, were as follows. Preferred Stock (8%, $50 par, cumulative, 11,000 shares authorized) $ 425,000
The stockholders equity accounts of Castle Corporation on January 1, 2017, were as follows.
Preferred Stock (8%, $50 par, cumulative, 11,000 shares authorized) | $ 425,000 | |
Common Stock ($1 stated value, 1,950,000 shares authorized) | 1,150,000 | |
Paid-in Capital in Excess of ParPreferred Stock | 105,000 | |
Paid-in Capital in Excess of Stated ValueCommon Stock | 1,450,000 | |
Retained Earnings | 1,850,000 | |
Treasury Stock (10,500 common shares) | 42,000 |
During 2017, the corporation had the following transactions and events pertaining to its stockholders equity.
Feb. | 1 | Issued 25,500 shares of common stock for $116,000. | |
Apr. | 14 | Sold 5,800 shares of treasury stockcommon for $33,900. | |
Sept. | 3 | Issued 5,200 shares of common stock for a patent valued at $35,900. | |
Nov. | 10 | Purchased 1,100 shares of common stock for the treasury at a cost of $6,000. | |
Dec. | 31 | Determined that net income for the year was $450,000. |
No dividends were declared during the year.
A: Journalize the transactions and the closing entry for net income.
B: Enter the beginning balances in the accounts, and post the journal entries to the stockholders equity accounts.
C: Prepare a stockholders equity section at December 31, 2017, including the disclosure of the preferred dividends in arrears.
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