The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current fiscal year:Preferred 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued)$3,980,000Paid-In Capital in Excess of Par—Preferred Stock159,200Common Stock, $3 par (5,000,000 shares authorized, 1,870,000 shares issued)5,610,000Paid-In Capital in Excess of Par—Common Stock1,215,500Retained Earnings31,497,000 During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:Jan.5Issued 532,900 shares of common stock at $9, receiving cash.Feb.10 Issued 11,000 shares of preferred 1% stock at $58.Mar.19Purchased 45,400 shares of treasury stock for $8 per share.May16Sold 21,400 shares of treasury stock for $10 per share.Aug.25Sold 4,300 shares of treasury stock for $7 per share.Dec.6Declared cash dividends of $0.50 per share on preferred stock and $0.07 per share on common stock. 31Paid the cash dividends. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answered: The following selected accounts appear…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter13: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...

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The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current fiscal year:

Preferred 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued)	$3,980,000
Paid-In Capital in Excess of Par—Preferred Stock	159,200
Common Stock, $3 par (5,000,000 shares authorized, 1,870,000 shares issued)	5,610,000
Paid-In Capital in Excess of Par—Common Stock	1,215,500
Retained Earnings	31,497,000

During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:

Jan.	5	Issued 532,900 shares of common stock at $9, receiving cash.
Feb.	10	Issued 11,000 shares of preferred 1% stock at $58.
Mar.	19	Purchased 45,400 shares of treasury stock for $8 per share.
May	16	Sold 21,400 shares of treasury stock for $10 per share.
Aug.	25	Sold 4,300 shares of treasury stock for $7 per share.
Dec.	6	Declared cash dividends of $0.50 per share on preferred stock and $0.07 per share on common stock.
	31	Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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Treasury stock refers to a method used by the organization to repurchase the issued stock. It is also known with the name of buyback of share. The management has the power to reissue these treasury stock in the future.

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