Questions 6-7 fof 10 The following information applies to the questions displaye

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Questions 6-7 fof 10 The following information applies to the questions displayed below! Major Lea e Apparel has two classes of snock aut onzed 4% $10 par pre ened, and SI per vale co me The lolo ng transacens atea a ekhoas easy anga a t needene January 2 Issue 120,000 shares of common stock for $56 per share February 14 Issue 46.000 shares of preferred stock for $13 per share May 8 Repurchase 12,000 shares of ins own common stock for $46 per share May 31 Ressue 6,000 shares of treasury stock for $51 per share December 1 Declare a cash divdend on ns common stock of SO 70 per shere and a St8,400 4% of par value cash, do end on es preferred stock payable to o. stockholders of record on December 15 The dividend is payable on December 30 (Mint Dividends are not paid on treasury stock) December 30 Pay the cash dividends declared on December 1 6 130 points Required: Record each o these transactions (if no entry is required tor a particular transaction, select "No yourmal entry requirer" in the first account hea)

Explanation / Answer

Major Leage Apparel Date/S.N. Account title & Explanation Debit Credit 2018 Amount in $ Amount in $ Jan-02 Cash 6720000 Common stock 120000 Paid in capital in excess of par(common stock) 6600000 To record the issuance of common stock Feb-14 Cash 598000 preferred stock 460000 Paid In capital in excess of par(Preferred stock) 138000 To record the issuance of preferred stock May-08 Treasury stock 552000 Cash 552000 To record the purchase of common stock Aug-10 Cash 306000 Paid In capital from treasury stock 30000 Treasury stock 276000 To record the issuance of treasury stock Dec-01 Cash dividend on common stock 79800 Cash dividend on preferred stock 18400 Dividend Payable 98200 Dec-15 Dividend payable 18400 Cash 18400 Dec-31 Dividend payable 79800 Cash 79800 Dec-31 Retained Earnings 98200 Cash dividend on common stock 79800 Cash dividend on preferred stock 18400 To record the declaration & payment of dividend on common as well as preferred stock Dec-31 Income summery 186700 Retained earnings 186700 To record the transfer of Net Income to retained earnings Stock holder's Equity December 31, 2018 Capital stock Common stock of 120000 at $1 per share 1200000 Preferred stock of 46000 at $10 per share 460000 Total capital stock 1660000 Additional Paid in Capital Additional Paid in capital in excess of par Common stock 6600000 Additional Paid in capital in excess of par Preferred stock 138000 138000 Additional paid in from treasury stock 30000 Total Paid in capital 6906000 Retained Earning 377800 Less : Treasury stock(100*19) 276000 Total stockholder's equity 8667800 Statement of Retained earnings Beginning Balance 0 Add : Net income from Income summery 476000 Less : Cash Dividend 98200 Ending Balance 377800

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