Smiley, Inc., is authorized to sell 1,000,000 shares of $10 par value common sto

Question

Smiley, Inc., is authorized to sell 1,000,000 shares of $10 par value common stock and 50,000 shares of $100 par value 6 percent preferred stock. As of the end of the current year, the company has actually sold 550,000 shares of common stock at $12 per share and 40,000 shares of preferred stock at $110 per share. In addition, of the 550,000 shares of common that have been sold, 40,000 shares have been repurchased at $60 per share and are currently being held in treasury to be used to meet the future requirements of a stock option plan that the company intends to implement. a. Prepare the general journal entries required to record all of the above transactions. b.Prepare the stockholders

Explanation / Answer

For year ended _______________ Revenues $480,000 Expenses 430,000 Income from continuing operations $50,000 Discontinued operations: Operating income from discontinued operations, net of $10,000 income taxes $15,000 Loss on the sale of discontinued operations, net of $22,000 33,000 ($18,000) Net income $32,000

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