Northwest Clothing Supply has the following transactions during the year related

Question

Northwest Clothing Supply has the following transactions during the year related to stockholders' equity At the beginning of the year it has 3000 shares of common stock and 450 shares of preferred stock outstanding.(21 points) January 1 Issues 3,000 shares of no-par value common stock for $30 per share. Board meets and establishes a par value of $15 per share for common stock and $25 per share for 8% February 5 preferred stock. March 15 July1 September 30 November 1 November 15 Issues 800 shares of $25 par value preferred stock for $32 per share repurchases 1600 shares for $25 per share Reissues 500 shares for $18 per share Reissues 900 shares for $28 per share Declares a cash dividend of $3.50 per share to all stock holders of record on October 20 Pays the cash dividend declared on November 15. December 19 Record each of these transactions GENERAL JOURNAL PAGE POST REF. DEBIT CRE DATE DESCRIPTION

Explanation / Answer

Journal entries: Date Acounts title and explanations Debit $ Credit $ 1-Jan Cash Account Dr. 90000     Common Stock No par Account 90000 5-Feb No Entry 15-Mar Cash Account (800*32) 25600      Preferred Stock Capital Account 20000      Paid in capital in excess of par value-Preferred 5600 1-Jul Treasury Stock Account Dr. 40000       Cash account 40000 30-Sep Cash account Dr. 9000 Retained earning Account Dr. 3500     Treasury Stock Account 12500 1-Nov Cash account Dr. 25200     Treasury Stock Account 22500     Paid in capital-Treasury Stock Account 2700 15-Nov Dividend Account Dr. 24675     Dividend-Common Payable (5800*3.5) 20300     Dividend-Preferred Payable (1250*3.50) 4375 19-Dec Dividend-Common Payable Account Ddr. 20300 Dividend-Prefered payable Account Dr. 4375        Cash Account 24675

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