Answered: The following selected accounts appear…

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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Question

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

Preferred 1% Stock, $50 par (100,000 shares authorized, 75,100 shares issued)	$3,755,000
Paid-In Capital in Excess of Par—Preferred Stock	165,220
Common Stock, $3 par (5,000,000 shares authorized, 2,020,000 shares issued)	6,060,000
Paid-In Capital in Excess of Par—Common Stock	1,212,000
Retained Earnings	35,446,000

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

a.	Issued 519,600 shares of common stock at $8, receiving cash.
b.	Issued 10,800 shares of preferred 1% stock at $61.
c.	Purchased 46,400 shares of treasury common for $8 per share.
d.	Sold 20,800 shares of treasury common for $10 per share.
e.	Sold 5,600 shares of treasury common for $7 per share.
f.	Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock.
g.	Paid the cash dividends.