The following information applies to the questions displayed below.] Prairie Cor
ID: 2412924 • Letter: T
Question
The following information applies to the questions displayed below.] Prairie Corp. completed the following transactions in 2014, the first year of operation 1. Issued 19,000 shares of $5 par common stock at par. 2. Issued 1,800 shares of $34 stated value preferred stock at $36 per share. 3. Purchased 400 shares of common stock as treasury stock for $7.5 per share. 4. Declared a 5 percent cash dividend on preferred stock. 5. Sold 200 shares of treasury stock for $10.5 per share. 6. Paid the cash dividend on preferred stock that was declared in Event 4 7. Earned revenue of $71,400 and incurred operating expenses of $38,050 8. Appropriated $6,500 of retained earnings.Explanation / Answer
Answers
Event
Cash
Dividends payable
Preferred Stock
Common Stock
PIC in excess Preferred stock
PIC in excess Treasury stock
Treasury Stock
Retained Earnings
Appropriated RE
Accounts title for RE
1
$ 95,000.00
$ 95,000.00
2
$ 64,800.00
$ 61,200.00
$ 3,600.00
3
$ (3,000.00)
$ 3,000.00
4
$ 3,060.00
$ (3,060.00)
Preferred stock dividend
5
$ 2,100.00
$ 600.00
$ (1,500.00)
6
$ (3,060.00)
$ (3,060.00)
7a
$ 71,400.00
$ 71,400.00
Revenues
7b
$ (38,050.00)
$ (38,050.00)
Operating expenses
8
$ (6,500.00)
$ 6,500.00
Appropriation
Ending Balances
$ 1,89,190.00
$ -
$ 61,200.00
$ 95,000.00
$ 3,600.00
$ 600.00
$ 1,500.00
$ 23,790.00
$ 6,500.00
---Working
Event
Cash
Dividends payable
Preferred Stock
Common Stock
PIC in excess Preferred stock
PIC in excess Treasury stock
Treasury Stock
Retained Earnings
Appropriated RE
Accounts title for RE
1
=19000*5
=19000*5
2
=1800*36
=1800*34
=1800*2
3
=-400*7.5
=400*7.5
4
=61200*5%
-3060
Preferred stock dividend
5
=200*10.5
=200*(10.5-7.5)
=-200*7.5
6
-3060
-3060
7a
71400
71400
Revenues
7b
-38050
-38050
Operating expenses
8
-6500
6500
Appropriation
Ending Balances
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
This is based on above Ending Balances:
Stockholder's Equity
Common Stock
$ 95,000.00
Preferred Stock
$ 61,200.00
PIC in excess Preferred stock
$ 3,600.00
PIC in excess Treasury stock
$ 600.00
Total paid in Capital
$ 1,60,400.00
Retained Earnings
Unappropriated Retained Earnings
$ 23,790.00
Appropriated Retained earnings
$ 6,500.00
Total retained Earnings
$ 30,290.00
Treasury Stock
$ (1,500.00)
Total Stockholder's Equity
$ 1,89,190.00
Event
Cash
Dividends payable
Preferred Stock
Common Stock
PIC in excess Preferred stock
PIC in excess Treasury stock
Treasury Stock
Retained Earnings
Appropriated RE
Accounts title for RE
1
$ 95,000.00
$ 95,000.00
2
$ 64,800.00
$ 61,200.00
$ 3,600.00
3
$ (3,000.00)
$ 3,000.00
4
$ 3,060.00
$ (3,060.00)
Preferred stock dividend
5
$ 2,100.00
$ 600.00
$ (1,500.00)
6
$ (3,060.00)
$ (3,060.00)
7a
$ 71,400.00
$ 71,400.00
Revenues
7b
$ (38,050.00)
$ (38,050.00)
Operating expenses
8
$ (6,500.00)
$ 6,500.00
Appropriation
Ending Balances
$ 1,89,190.00
$ -
$ 61,200.00
$ 95,000.00
$ 3,600.00
$ 600.00
$ 1,500.00
$ 23,790.00
$ 6,500.00
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