InstructionsThe shareholders' equity section of Superior Corporation's balance sheet as of December 31, 2015, is as follows:Shareholders' EquityPreferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares$3,300,000Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares1,885,000Paid-in capital in excess of par-preferred96,000Paid-in capital in excess of par-common825.000Retained earnings2,920,000$9,026,000The following events occurred during 2016:Jan. 510,500 shares of authorized and unissued common stock were sold for $7 per share.1610,000 shares of authorized and unissued preferred stock were sold for $108 per share.Apг. 179,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superioruses the cost method to account for treasury stock.Sept. 13,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraisedvalue of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of$109 per share.Dec. 124,000 shares of treasury stock are reissued at a price of $24 per share.Required:1. Prepare journal entries for each of the above transactions.2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2016.3. Calculate Superior's legal capital at December 31, 2016.

The question is based on the concept of Financial Accounting.

Answered: The shareholders' equity section of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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