Date Account Titles and Explanation Debit Credit Feb. 1 Apr. 14 Sept. 3 Nov. 10

Question

Date

Account Titles and Explanation

Debit

Credit

Feb. 1

Apr. 14

Sept. 3

Nov. 10

Dec. 31

Preferred Stock

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

Common Stock

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

J5

J5

Paid-in Capital in Excess of Par—Preferred Stock

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

Paid-in Capital in Excess of Stated Value—Common Stock

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

J5

J5

Paid-in Capital from Treasury Stock

Date

Explanation

Ref

Debit

Credit

Balance

J5

Retained Earnings

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

J5

Treasury Stock

Date

Explanation

Ref

Debit

Credit

Balance

Balance

?

J5

J5

CASTLE CORPORATION
Balance Sheet (Partial)
December 31, 2014

The stockholders’ equity accounts of Castle Corporation on January 1, 2014, were as follows.
Preferred Stock (8%, $49 par, cumulative, 10,600 shares authorized) $  406,700 Common Stock ($1 stated value, 1,963,000 shares authorized) 1,127,700 Paid-in Capital in Excess of Par—Preferred Stock 117,200 Paid-in Capital in Excess of Stated Value—Common Stock 1,467,600 Retained Earnings 1,809,400 Treasury Stock (10,100 common shares) 50,500
During 2014, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 25,900 shares of common stock for $121,500. Apr. 14 Sold 6,000 shares of treasury stock—common for $33,500. Sept. 3 Issued 5,100 shares of common stock for a patent valued at $35,800. Nov. 10 Purchased 1,100 shares of common stock for the treasury at a cost of $5,700. Dec. 31 Determined that net income for the year was $435,100.
No dividends were declared during the year.

Explanation / Answer

Bank A/c Dr.

To Common stock A/c

(Issued 25,900 shares of common stock for $121,500.)

121500

121500

Bank A/c Dr.

To Treasury Stock A/c

(Sold 6,000 shares of treasury stock—common for $33,500.)

33500

33500

Patent A/c Dr.

To Common stock A/c

(Issued 5,100 shares of common stock for a patent valued at $35,800.)

35800

35800

Common stock A/c Dr.

To Bank A/c

(Purchased 1,100 shares of common stock for the treasury at a cost of $5,700.)

5700

5700

Profit & Loss A/c Dr.

To Net income A/c

(Determined that net income for the year was $435,100. i.e. closing entry for net income)

435100

Date Particulars Debit (Dr.) Credit (Cr.) Feb 1

Bank A/c Dr.

To Common stock A/c

(Issued 25,900 shares of common stock for $121,500.)

121500

121500

April 14

Bank A/c Dr.

To Treasury Stock A/c

(Sold 6,000 shares of treasury stock—common for $33,500.)

33500

33500

Sept. 3

Patent A/c Dr.

To Common stock A/c

(Issued 5,100 shares of common stock for a patent valued at $35,800.)

35800

35800

Nov. 10

Common stock A/c Dr.

To Bank A/c

(Purchased 1,100 shares of common stock for the treasury at a cost of $5,700.)

5700

5700

Dec. 31

Profit & Loss A/c Dr.

To Net income A/c

(Determined that net income for the year was $435,100. i.e. closing entry for net income)

435100

435100

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