Exercise 15-18 (Part Level Submission) (a) Prepare journal entries to record the

Question

Exercise 15-18 (Part Level Submission)

(a)

Prepare journal entries to record the transactions described above

Exercise 15-18 (Part Level Submission)

Flint Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 1,800 shares issued) $180,000 Common stock, $5 par (101,000 shares authorized, 20,200 shares issued) 101,000 Additional paid-in capital 119,000 Retained earnings 447,000    Total $847,000
During 2017, Flint took part in the following transactions concerning stockholders’ equity.
1. Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,500 shares of its own outstanding common stock for $37 per share. Flint uses the cost method. 3. Reissued 700 treasury shares for land valued at $28,400. 4. Issued 500 shares of preferred stock at $106 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $48 per share. 6. Issued the stock dividend. 7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.

Explanation / Answer

Date Account titles & explanations Debit Credit 1) Dividends payable-PS 18,000 Dividends payable-CS 40400 cash 58,400 (1800*10+20200*2) 2) Treasury stock 55500 cash (1500*37) 55,500 3) land 28,400 Treasury stock (700*37) 25900 paid in capital in excess -TS 2,500 4) Cash (500*106) 53000 preferred stock 50000 Addittional paid in capital -PS 3000 5) Stock dividend (1940*48) 93120 common stock div distributable 9700 addittional paid in capital-Cs 83420 (20200-1500+700)*10%= 1940 shares) 6) Common stock dividend distributable 9,700 common stock. 9,700 7) Dividends -ps (1800+500)*10 23000 Dividends CS (19400+1940)*2 42680 dividends payable. 65680

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