During 2014, Haley engaged in the following transactions involving its equity ac

Question

During 2014, Haley engaged in the following transactions involving its equity accounts:

a.Sold 5,000 shares of common stock for $19 per share.

b.Sold 1,200 shares of 12%, $50 par preferred stock at $75 per share.

c.Declared and paid cash dividends of $22,000.

d.Repurchased 1,000 shares of treasury stock (common) for $24 per share.

e.Sold 300 of the treasury shares for $26 per share.

Required:

1. Prepare the journal entries for Transactions a through e. For a compound transaction

2. Assume that 2014 net income was $123,700. Prepare a statement of stockholders' equity at December 31, 2014.

Explanation / Answer

Tran. No Accounts Title Dr Cr a Cash 95000 Common Stock (5000*19) 95000 (Being common stock sold) b Cash 90000 Preferred stock (1200*$50) 60000 Paid in capital in excess of par-Preferred Stock (1200*25) 30000 c Retained Earnings 22000 Dividend Payable 22000 (Being dividend declared) Dividend Payable 22000 Cash 22000 d Treasury Stock 24000 Cash (1000*24) 24000 e Cash 7800 Treasury Stock (300*24) 7200 Paid in capital in excess of par-Treasury Stock (300*2) 600 Statement of Stockholder Equity Preferred Stock 1200 shares issued par value $50 60000 Common Stock issued 5000 shares at $19 95000 Paid in capital in excess of par-Preferred Stock 30000 Paid in capital in excess of par-Treasury Stock 600 Total Paid In capital 185600 Retained Earnings (123700-22000) 101700 Less: Treasury stock (700 shares at $24) -16800 Stockholder Equity as on 31 Dec 2014 270500

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