The stockholders' equity accounts of the Capozza Corporation on January 1, 1996, were as follows:

During 1996, the corporation had the following transactions and events pertaining to its stockholders' equity:
Feb. 1 Issued 20,000 shares of common stock for \(\$ 100,000\).
Apr. 14 Sold 6,000 shares of treasury stock-common for \(\$ 28,000\).
Sept. 3 Issued 5,000 shares of common stock for a patent valued at \(\$ 25,000\).
Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of \(\$ 6,000\).
Dec. 31 Determined that net income for the year was \(\$ 377,000\).
No dividends were declared during the year.

\section*{Instructions}

(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. (Use J5 for the posting reference.)

(c) Prepare a stockholders' equity section at December 31, 1996, including the disclosure of the preferred dividends in arrears.
*

(d) Compute the book value per share of common stock at December 31, 1996. (Round to two decimals.)

Transcribed Image Text:

Preferred Stock (12%, $50 par cumulative, 10,000 shares authorized) Common Stock ($1 stated value, 2,000,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock-Common (10,000 shares) $ 400,000 1,000,000 80,000 1,400,000 '1,816,000 40,000