12. The Stockholders' equity accounts of Blue Spruce Corporation on january 1, 2022, were as follows: Preferred Stock (8%, $52 par, 10,500 shares authorized) $ 442,000 Common Stock ($1 stated value, 2,000,000 shares authorized) 1,350,000 Paid-in Capital in Excess of Par-Preferred Stock 100,000 Paid-in Capital in Excess of Stated Value-Common Stock 1,450,000 Retained Earnings 1,850,000 Treasury Stock (10,000 common shares) 50,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 25,000 shares of common stock for $124,000. Aprг. 14 Sold 5,900 shares of treasury stock-common for $32,000. Sept. 3 Issued 4,700 shares of common stock for a patent valued at $34,300. Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $5,800. Dec. 31 Determined that net income for the year was $435,000. 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. (Use 15 for the posting reference) c. Prepare a stockholder' equity section at December 31, 202?
12. The Stockholders' equity accounts of Blue Spruce Corporation on january 1, 2022, were as follows: Preferred Stock (8%, $52 par, 10,500 shares authorized) $ 442,000 Common Stock ($1 stated value, 2,000,000 shares authorized) 1,350,000 Paid-in Capital in Excess of Par-Preferred Stock 100,000 Paid-in Capital in Excess of Stated Value-Common Stock 1,450,000 Retained Earnings 1,850,000 Treasury Stock (10,000 common shares) 50,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 25,000 shares of common stock for $124,000. Aprг. 14 Sold 5,900 shares of treasury stock-common for $32,000. Sept. 3 Issued 4,700 shares of common stock for a patent valued at $34,300. Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $5,800. Dec. 31 Determined that net income for the year was $435,000. 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. (Use 15 for the posting reference) c. Prepare a stockholder' equity section at December 31, 202?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 5MC
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Transcribed Image Text:The Stockholders' equity accounts of Blue Spruce
Corporation on january 1, 2022, were as follows:
12.
Preferred Stock (8%, $52 par, 10,500 shares authorized)
$ 442,000
Common Stock ($1 stated value, 2,000,000 shares authorized)
1,350,000
Paid-in Capital in Excess of Par-Preferred Stock
100,000
Paid-in Capital in Excess of Stated Value-Common Stock
1,450,000
Retained Earnings
1,850,000
Treasury Stock (10,000 common shares)
50,000
During 2022, the corporation had the following transactions
and events pertaining to its stockholders' equity.
Feb.
Issued 25,000 shares of common stock for $124,000.
Apr.
14
Sold 5,900 shares of treasury stock-common for $32,000.
Sept.
3
Issued 4,700 shares of common stock for a patent valued at $34,300.
Nov.
10
Purchased 1,000 shares of common stock for the treasury at a cost of $5,800.
Dec.
31
Determined that net income for the year was $435,000.
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. (Use 15 for the posting reference)
c. Prepare a stockholder' equity section at December 31,
2022.
Expert Solution
Step 1
Journal Entry
The purpose of preparing the journal entry to enter the required transaction into debit and credit. Debit all expenses related transaction and credit all income related transaction as well. Journal entry is the basic process of accounting work as well.
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