(a) Journalize the transactions and the closing entry for net income.
(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts.
(c) Prepare a stockholders' equity section at December 31, 2002.
(d) Compute the book value per share of common stock at December 31, 2002, assuming the preferred stock does
(See attached file for full problem description)
The stockholders' equity accounts of Pedro Corporation on January 1, 2002, were as follows:
Preferred stock $100 Par value 10% noncumulative $300,000 5,000 shares authorized
Common stock $5 Par value 1,000,000 300,000 shares authorized
Paid-in capital in excess of par value - P/S 15,000
Paid-in capital in excess of par value - C/S 400,000
Retained earnings 488,000
Treasury stock (5,000 shares) 40,000 5,000 shares
During 2002, the corporation had the following transactions and events pertaining to its stockholders' equity:
Feb 1 Issued common stock for cash 4,000 shares $25,000 cash
Mar 20 Purchased additional shares of treasury stock 1,000 shares $8 per share
Jun 14 Sold treasury stock for cash 4,000 shares $34,000 cash
Sep 3 Issued shares of common stock for patent 2,000 shares $13,000 patent value
Dec 31 Determined net income for the year $215,000
The solution has journal entries for various transactions affecting stockholders equity and the preparation of the stockholders equity section of the balance sheet of Pedro Corporation