ABC Company reported the following amounts in stockholders equity section of its December 31, 2016 b
ABC Company reported the following amounts in stockholders equity section of its December 31, 2016 balance sheet.
Preferred Stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000
Common Stock, $5 par (108,000 shares authorized, 21,600 shares issued) 108,000
Additional Paid-in Capital 119,000
Retained Earnings 419,000
Total $846,000
A) During 2017, the company took part in the following transaction concerning stockholders equity and performed the below journal entries:
1) Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016.
2) Purchased 1,700 shares of its own outstanding common stock for $41 per share. They used the cost method.
3) Reissued 600 treasury shares for land valued at $27,800.
4) Issued 480 shares of preferred stock at $104 per share.
5) Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $42 per share.
6) Issued the stock dividend.
7) Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.
B) Prepare the December 31, 2017, stockholders’ equity section. Assume 2017 net income was $323,000. Include the lines as follows:
Capital Stock
Preferred Stock
Common Stock
Total Capital Stock
Additional Paid-in Capital
Total Paid-in Capital
Retained Earnings
Total Paid-in Capital and Retained Earnings
Less: Treasury Stock
Total Stockholders Equity
