Selected Stock Transactions The following selected accounts appear in the ledger
ID: 2497238 • Letter: S
Question
Selected Stock Transactions
The following selected accounts appear in the ledger of Patton Environmental Inc. on July 1, 2014, the beginning of the current fiscal year:
During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:
Issued 50,000 shares of common stock at $30, receiving cash.
Issued 13,000 shares of preferred 2% stock at $194.
Purchased 30,000 shares of treasury common for $840,000.
Sold 15,000 shares of treasury common for $465,000.
Sold 10,000 shares of treasury common for $260,000.
Declared cash dividends of $3.50 per share on preferred stock and $0.12 per share on common stock.
Paid the cash dividends.
Journalize the entries to record the transactions.
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Issued 50,000 shares of common stock at $30, receiving cash.
Cash _1500000_________ __$0__________
Common Stock ____$0_____ ___________
Paid-In Capital in Excess of Par-Preferred Stock___$0_______ _____________
b. Issued 13,000 shares of preferred 2% stock at $194.
Cash ______ _$0______
Preferred stock___$0____ _______
Paid-in-capital in excess__$0____ _________
c. Purchased 30,000 shares of treasury common for $840,000.
______ __840000_______
________ ___840000_______
f. Declared cash dividends of $3.50 per share on preferred stock and $0.12 per share on common stock.
__________ ___________
_____________ ______________
g. Paid the cash dividends.
______ ________
_______ __________
Preferred 2% Stock, $175 par (50,000 shares authorized, 25,000 shares issued) $4,375,000 Paid-In Capital in Excess of Par—Preferred Stock 875,000 Common Stock, $25 par (500,000 shares authorized,
330,000 shares issued) 8,250,000 Paid-In Capital in Excess of Par—Common Stock 1,070,000 Retained Earnings 30,888,000
Explanation / Answer
Patton Environmental Inc. Journal Entries a. Issued 50,000 shares of common stock at $30, receiving cash Account Titles and Explanation Debit Credit Cash $ 15,00,000 Common stock $ 12,50,000 Paid-In Capital in Excess of Par—Common Stock $ 2,50,000 (For issue of common stock par value $ 25 per share) b Issued 13,000 shares of preferred 2% stock at $194. Account Titles and Explanation Debit Credit Cash $ 25,22,000 Preferred 2% stock $ 22,75,000 Paid-In Capital in Excess of Par—preferred stock $ 2,47,000 (For issue of preferred 2% stock par value $ 175 per share) c Purchased 30,000 shares of treasury common for $840,000. Account Titles and Explanation Debit Credit Treasury stock $ 8,40,000 Cash $ 8,40,000 (Purchased 30,000 shares of treasury common) f. Declared cash dividends of $3.50 per share on preferred stock and $0.12 per share on common stock. Calculation of preferred dividends 25,000 + 13,000 = 38,000 shares outstanding 38,000 x $ 3.50 = $ 133,000 dividends Calculation of Common dividends 330,000 + 50,000 = 380,000 shares outstanding 380,000 x $ 0.12 = $ 45,600 dividends Account Titles and Explanation Debit Credit Cash dividends $ 1,78,600 Cash dividends payable $ 1,78,600 (Declared cash dividends on preferred stock- $ 133,000, common stock - $ 45,600) g. . Paid the cash dividends Account Titles and Explanation Debit Credit Cash dividends payable $ 1,78,600 Cash $ 1,78,600 (Paid cash dividends on preferred stock- $ 133,000, common stock - $ 45,600)
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