Balance Account Cash (from stock and for dividends paid] Subscriptions Receivable: Common Stock Subscriptions Receivable: Preferred Stock Equipment Preferred Stock Subscribed (for 300 shares) 8% Preferred Stock, $100 par (2,300 shares) Additional Paidin Capital on Preferred Stock Common Stock Subscribed (2,000 shares Common Stock, $5 stated value (9,000 shares) Additional Paidin Capital on Common Stock Retained Earnings Debit Credit $250,000 14,000 33,600 69,000 $ 30,000 230,000 33,000 10,000 45,000 46,000 2,600
Reconstruct
During the first year, the following events occurred:
1. Subscription contracts were entered into for common stock at $9 per share and
2. One thousand shares of common stock were sold for $11 per share, and the stock was issued to shareholders.
3. Equipment with an appraised value of $69,000 was acquired by issuing 600 shares of preferred stock. The appraised value of the
equipment was used to record the transaction.
4. Net income of $30,000 was closed to
5. Dividends of $8 per share on all the preferred stock outstanding and $1 per share on all the common stock outstanding were distributed at the end of the year (the company debited Retained Earnings and credited Cash for each dividend).
Required:
Next Level On the basis of the preceding information, reconstruct all the journal entries that the company made to record the stock transactions, net income, and dividends. It may be helpful to begin by using T- accounts and entering the ending balances.
To determine Prepare the journal entries based on the given information to record the stock transactions, net income, and dividends.
![Balance
Account
Cash (from stock and for dividends paid]
Subscriptions Receivable: Common Stock
Subscriptions Receivable: Preferred Stock
Equipment
Preferred Stock Subscribed (for 300 shares)
8% Preferred Stock, $100 par (2,300 shares)
Additional Paidin Capital on Preferred Stock
Common Stock Subscribed (2,000 shares
Common Stock, $5 stated value (9,000 shares)
Additional Paidin Capital on Common Stock
Retained Earnings
Debit
Credit
$250,000
14,000
33,600
69,000
$ 30,000
230,000
33,000
10,000
45,000
46,000
2,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bda8fce-1838-4de3-acd7-0d4518194e19%2F0bb1934b-2fc9-42a9-aae9-ee67bdca4f8c%2F8ernx4_processed.png&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
