Pringle Corporation has been authorized to issue 24,000 shares of $100 par value
ID: 2454484 • Letter: P
Question
Pringle Corporation has been authorized to issue 24,000 shares of $100 par value, 7%, noncumulative preferred stock and 1,068,400 shares of no-par common stock.
The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.
The preferred stock was issued for $174,020 cash. All common stock issued was for cash. In November 4,010 shares of common stock were purchased for the treasury at a per share cost of $14. No dividends were declared in 2014.
Purchase of common treasury stock for cash
Preferred Stock $153,100 Paid-in Capital in Excess of Par Value—Preferred Stock 20,920 Common Stock 1,960,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,747,000 Treasury Stock— (4,010 common shares) 56,140 Retained Earnings 80,500Explanation / Answer
(1) Issue preferred stock
DR Cash $174,020
Preferred stock $153,100
Paid-in Capital in Excess of Par Value—Preferred Stock $20,920
To record issurance of $153,100 preferred stock for $174,020 cash)
(2) Issue of common stock
DR Cash $3,707,000
Common stock $1,960,000
Paid-in Capital in Excess of Stated Value—Common Stock $1,747,000
(To record issue of Common Stock with stated value for cash)
(3) Purchase of treasury stock
Nov 4, 2010
DR Treasury Stock $20,050
DR Paid-in Capital in Excess of Stated Value—Common Stock $36,090
Cash $56,140
(To record purchase of $5 stated-value treasury stock for $14)
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