The stockholders’ equity accounts of Swifty Corporation on January 1, 2017, were

Question

The stockholders’ equity accounts of Swifty Corporation on January 1, 2017, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,000 shares authorized) $300,000 Common Stock ($4 stated value, 300,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 15,000 Paid-in Capital in Excess of Stated Value—Common Stock 480,000 Retained Earnings 689,000 Treasury Stock (5,000 common shares) 40,000
During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 5,000 shares of common stock for $35,000. Mar. 20 Purchased 1,000 additional shares of common treasury stock at $7 per share. Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. 31 Determined that net income for the year was $275,600. Paid the dividend declared on December 1. The stockholders’ equity accounts of Swifty Corporation on January 1, 2017, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,000 shares authorized) $300,000 Common Stock ($4 stated value, 300,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 15,000 Paid-in Capital in Excess of Stated Value—Common Stock 480,000 Retained Earnings 689,000 Treasury Stock (5,000 common shares) 40,000
During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 5,000 shares of common stock for $35,000. Mar. 20 Purchased 1,000 additional shares of common treasury stock at $7 per share. Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. 31 Determined that net income for the year was $275,600. Paid the dividend declared on December 1. Date Account Titles and Explanation Debit Credit (To record net income) (To close cash dividends) (To record payment of cash dividends payable)

Problem 11-2A

The stockholders’ equity accounts of Swifty Corporation on January 1, 2017, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,000 shares authorized) $300,000 Common Stock ($4 stated value, 300,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 15,000 Paid-in Capital in Excess of Stated Value—Common Stock 480,000 Retained Earnings 689,000 Treasury Stock (5,000 common shares) 40,000
During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 5,000 shares of common stock for $35,000. Mar. 20 Purchased 1,000 additional shares of common treasury stock at $7 per share. Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.85 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. 31 Determined that net income for the year was $275,600. Paid the dividend declared on December 1.

Explanation / Answer

Journal entry :

D

Date accounts & explanation debit credit Feb 1 Cash 35000     Common Stock 20000     Paid in capital in excess of stated value-COmmon Stock 15000 (To record issue common stock) Mar 20 Treasury stock 7000      Cash 7000 (To record purchase treasury stock) Oct 1 Cash dividend 24000     Preferred dividend payable (300000*8%) 24000 (To record dividend declared) Nov 1 Preferred dividend payable 24000      Cash 24000 (To record dividend paid) Dec 1 Cash dividend (254000*.85) 215900     Common dividend payable 215900 (To record common stock dividend payable) Dec 31 Common Dividend payable 215900     Cash 215900 (To record dividend paid) Dec 31 Retained earnings 239900      Cash dividend 239900 (To record close dividend) Dec 31 Income summary 275600     Retained earnings 275600 (To close net income)

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