Stockholders\' Equity: Transactions and Balance Sheet Presentation The stockhold

Question

Stockholders' Equity: Transactions and Balance Sheet Presentation The stockholders' equity accounts of Windham Corporation at January 1 appear below: 8 Percent preferred stock, $25 par value, 50,000 shares authorized; 6,800 shares issued and outstanding $170,000 Common stock, $10 par value, 200,000 shares authorized 50,000 shares issued and outstanding Paid-in capital in excess of par value-Preferred stock Paid-in capital in excess of par value-Common stock Retained earnings 500,000 68,000 200,000 270,000 During the year, the following transactions occurred: 10 23 14 15 15 31 Issued 35,000 shares of common stock for $17 cash per share. Purchased 10,000 shares of common stock as treasury stock at $19 per share. Sold one-half of the treasury shares acquired January 23 for $21 per share. Issued 3,500 shares of preferred stock in exchange for equipment with a fair market value of $128,000. Sold 2,000 of the treasury shares acquired January 23 for $24 per share. Closed the net income of $59,000 to the Retained Earnings account. Jan. Mar. July Nov. Dec. a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. HINT: Complete part b. below prior to entering T-account data Cash Preferred Stock Common Stock Jan.10 Beg. Beg. ul.15 Jan.10 Mar.14 Bal. Bal Nov.15 Bal. Equipment Paid-in-Capital in Excess of Par Value- Preferred Stock Paid-in-Capital in Excess of Par Value Common Stock Jul.15 Beg. Beg. Bal Jul.15 Jan.10 Bal.

Explanation / Answer

10-Jan Cash 595000 (35000*17)         Common stock 350000 (35000*10)          Paid in capital in excess of common stock 245000 (35000*7) 23-Jan Treasury stock 190000 (10000*19)           Cash 190000 14-Mar Cash 105000 (5000*21)          Treasury stock 95000 (5000*19)          Paid in capital in excess of treasury stock 10000 (5000*2) 15-Jul equipment 128000           Prefereed stock 87500 (3500*25)          Paid in capital in excess of preferred stock 40500 15-Nov Cash 48000 (2000*24)          Treasury stock 38000 (2000*19)          Paid in capital in excess of treasury stock 10000 (2000*5) 31-Dec Income summary 59000           Retained earnings 59000 Stockholders equity Paid in capital Preferred stock $25 stated value 257500 (10300*25) Common stock $10 stated value 850000 (85000*10) Paid in capital in excess -common stock 445000 Paid in capital in excess -preferred stock 108500 Paid in capital in excess of Treasury stock 20000 Total paid in capital 1681000 Retained earnings 329000 Total 2010000 Less Treasury stock 57000 (3000*19) Total stockholders equity 1953000

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