p13-6a lol at December 31, 2017. $6,707000 assigned a $2.50 stated value to the

Question

p13-6a

lol at December 31, 2017. $6,707000 assigned a $2.50 stated value to the common stock. At December 31, 2017, the ledger con- storkholders equity scicn tained the following balances pertaining to stockholders' equity. stock and 1.000,000 shares of no-par common stock. The corporation traniactioms ond preparte S100 par value, Prepare euries for stock LO 2, 3, 4) Preferred Stock Paid-in Capital in Excess of Par-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Treasury Stock (1,000 common shares) Paid-in Capital from Treasury Stock Retained Earnings s 120,000 20,000 1,000,000 1,800,000 11,000 1,500 82,000 The preferred stock was issued for land having a fair value of $140,000. All common stock issued was for cash. In November, 1,500 shares of common stock were purchased for the treasury at a per share cost of $11. In December, 500 shares of treasury stock were sold for $14 per share. No dividends were declared in 2017. Instructions (a) Prepare the journal entries for the: (1) Issuance of preferred stock for land. (2) Issuance of common stock for cash. (3) Purchase of common treasury stock for cash. (4) Sale of treasury stock for cash. b) Total stockholders' e $3,012,500 (b) Prepare the stockholders' equity section at December 31, 2017.

Explanation / Answer

a) No. Account Titles and Explanations Debit Credit 1) Land $140,000.00 Preferred Stock $120,000.00 Paid-in Capital in Excess of Par Value-Preferred Stock $20,000.00 2) Cash $2,800,000.00 Common Stock $1,000,000.00 Paid-in Capital in Excess of Stated Value-Common Stock $1,800,000.00 3) Treasury Stock-Common $16,500.00 Cash (1500 x 11) $16,500.00 4) Cash (500 x 14) $7,000.00 Treasury Stock-Common $5,500.00 Paid-in Capital from Treasury Stock $1,500.00 b) Irvin Corporation December 31, 2014 Paid-in capital Capital stock 10% Preferred stock, $100 par value, noncumulative, 20,000 shares authorized, 1,200 shares issued and outstanding $120,000.00 Common stock, no par, $2.50 stated value, 1,000,000 shares authorized, 400,000 shares issued, and 399,000 outstanding $1,000,000.00 Total capital stock $1,120,000.00 Additional paid-in capital In excess of par value— preferred stock $20,000.00 In excess of stated value— common stock $1,800,000.00 From treasury stock— common $1,500.00 Total additional paid-in capital $1,821,500.00 Total paid-in capital $2,941,500.00 Retained earnings $82,000.00 Total paid-in capital and retained earnings $3,023,500.00 Less: Treasurystock(1,000 common shares) -$11,000.00 Total stockholders’ Equity $3,012,500.00

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