11-2A The stockholders\' equity accounts of Cyrus Corporation on January 1, 2017

Question

11-2A The stockholders' equity accounts of Cyrus Corporation on January 1, 2017, were Preferred Stock (7%, $100 par noncumulative, 5,000 shares authorized) Common Stock ($4 stated value, 300,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (5,000 common shares) 300,000 1,000,000 15,000 480,000 688,000 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 $30,000. Mar 20 Purchased 1,000 additional shares of common treasury stock at $7 per share. Oct. 1 Declared a 7% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.50 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Determined that net income for the year was $280,000. Paid the dividend declared on December 1. 31

Explanation / Answer

Date Account Titles and Explanation Debit Credit 1-Feb Cash $30,000 Common Stock $20,000 Paid-in Capital in excess of Stated Value - Common Stock $10,000 (To record issue of common shares) 20-Mar Treasury Stock $7,000 Cash $7,000 (To record the purchase of treasury stock) 1-Oct Cash Dividend (7% x 300,000) $21,000 Dividend Payable $21,000 (To record the cash dividend declared) 1-Nov Dividend Payable $21,000 Cash $21,000 (To record the payment of dividend payable) 1-Dec Cash Dividend (250,000 + 5,000 - 5,000 - 1,000) x $0.50 $124,500 Dividend Payable $124,500 (To record the cash dividend declared) 31-Dec Dividend Payable $124,500 Cash $124,500 (To record the payment of dividend payable) 31-Dec Retained Earnings $145,500 Cash Dividend $145,500 (To record the closing entry) 31-Dec Net Income $280,000 Retained Earnings $280,000 (To record the closing entry) Common Stock Bal. 1 Jan $300,000 1-Feb $20,000 Bal. 31 Dec $320,000 Preferred Stock Bal. 1 Jan $1,000,000 Bal. 31 Dec $1,000,000 Paid-in Capital in Excess of Par Value - Preferred Stock Bal. 1 Jan $15,000 Bal. 31 Dec $15,000 Paid-in Capital in Excess of Stated Value - Common Stock Bal. 1 Jan $480,000 1-Feb $10,000 Bal. 31 Dec $490,000 Cash Dividend 1-Oct $21,000 1-Dec $124,500 31-Dec $145,500 Dividend Payable 1-Nov $21,000 1-Oct $21,000 31-Dec $124,500 1-Dec $124,500 Cash 1-Feb $30,000 20-Mar $7,000 1-Nov $21,000 31-Dec $124,500 Bal. 31 Dec $122,500 Net Income 31-Dec $280,000 Bal. 1 Jan $280,000 Retained Earnings 31-Dec $145,500 Bal. 1 Jan $688,000 31-Dec $280,000 Bal. 31 Dec $822,500 Treasury Stock Bal. 1 Jan $40,000 20-Mar $7,000 Bal. 31 Dec $47,000 CYRUS CORPORATION Stockjolders' Equity Section As on 31st Dec. 2017 Particulars Amount Amount Paid-in Capital       Preferred Stock $300,000       Common Stock $1,020,000       Paid-in Capital in excess of Par Value - Preferred Stock $15,000       Paid-in Capital in excess of Stated Value - Common Stock $490,000 $1,825,000 Retained Earnings $822,500 Less: Treasury Stock ($47,000)               Total stockholders' equity $2,600,500

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