On January 5, 2020, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipmentwith a fair value of $50,000; a factory building with a fair value of $160,000; andland with an appraised value of $270,000. July 29 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.) Aug. 10 Sold the 1,800 treasury shares at $14 per share. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared thepreferred dividend. Dec. 31 Closed the Income Summary account. There was a $175,700 net income. Instructions a. Record the journal entries for the transactions listed above. b. Prepare the stockholders’ equity section of Phelps Corporation's balance sheet as of December 31, 2020.
On January 5, 2020, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipmentwith a fair value of $50,000; a factory building with a fair value of $160,000; andland with an appraised value of $270,000. July 29 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.) Aug. 10 Sold the 1,800 treasury shares at $14 per share. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared thepreferred dividend. Dec. 31 Closed the Income Summary account. There was a $175,700 net income. Instructions a. Record the journal entries for the transactions listed above. b. Prepare the stockholders’ equity section of Phelps Corporation's balance sheet as of December 31, 2020.
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...
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On January 5, 2020, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating
Jan. |
11
|
Issued 20,000 shares of common stock at $16 per share. | |
Feb. |
1
|
Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipment with a fair value of $50,000; a factory building with a fair value of $160,000; and land with an appraised value of $270,000. |
|
July |
29
|
Purchased 1,800 shares of common stock at $17 per share. (Use cost method.) | |
Aug. |
10
|
Sold the 1,800 treasury shares at $14 per share. | |
Dec. |
31
|
Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. |
|
Dec. |
31
|
Closed the Income Summary account. There was a $175,700 net income. |
Instructions
a. Record the
b. Prepare the
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