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    Catt Corporation: Stockholders' Equity Entries, dividends,

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    PART III ? Stockholders' Equity Entries

    Catt Corporation stockholders' equity consisted of the following on January 1, 2003:
    Stockholders' Equity
    Paid-in capital
    Capital stock
    5% Preferred stock, $100 par value, cumulative,
    50,000 shares authorized, 30,000 shares issued
    and outstanding $ 3,000,000
    Common stock, no par, $25 stated value, 1,000,000
    shares authorized, 400,000 shares issued and
    outstanding 10,000,000
    Total capital stock 13,000,000
    Additional paid-in capital
    In excess of par value?preferred $300,000
    In excess of stated value?common 600,000 900,000
    Total paid-in capital 13,900,000
    Retained earnings (Note A) 4,100,000
    Total stockholders' equity $18,000,000

    Note A: Preferred dividends are in arrears for 2002.

    Instructions
    Prepare the appropriate journal entries, if any, for the following transactions in 2003. You may omit journal entry explanations but you should show computations.

    1/25/03 Issued 60,000 shares of common stock for $42 per share.

    2/18/03 The Board of Directors declared a cash dividend on preferred and common stock totaling $700,000, payable on March 15, to stockholders of record on February 28. (Record dividends payable on preferred and common stock in separate accounts.)

    2/28/03 Date of record for cash dividends on preferred and common stock.

    3/15/03 Paid the cash dividend to preferred and common stockholders.

    5/20/03 Declared a 10% stock dividend on the common stock, payable on June 15, to stockholders of record on May 31. The market value of Catt Corporation's common stock was $45 per share.

    7/10/03 Purchased 50,000 shares of Catt Corporation's common stock for $49 per share to be held in the company's treasury.

    8/13/03 Sold 12,000 shares of treasury stock for $52 per share.

    11/12/03 Sold 20,000 shares of treasury stock for $25 per share.

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    Solution Preview

    PART III ? Stockholders' Equity Entries

    Catt Corporation stockholders' equity consisted of the following on January 1, 2003:
    Stockholders' Equity
    Paid-in capital
    Capital stock
    5% Preferred stock, $100 par value, cumulative,
    50,000 shares authorized, 30,000 shares issued
    and outstanding $ 3,000,000
    Common stock, no par, $25 stated value, 1,000,000
    shares authorized, 400,000 shares issued and
    outstanding 10,000,000
    Total capital stock 13,000,000
    Additional paid-in capital
    In excess of par value?preferred $300,000
    In excess of stated value?common 600,000 900,000
    Total paid-in capital 13,900,000
    Retained earnings (Note A) 4,100,000
    Total stockholders' equity $18,000,000

    Note A: Preferred dividends are in arrears for 2002.

    Instructions ...

    Solution Summary

    This solution is comprised of a detailed explanation to prepare the appropriate journal entries, if any, for the following transactions in 2003.

    $2.19