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Journal entries and closing entries for Pedro Corporation

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I need a example problem to learn from because I am having trouble with closing entries and would like this one question explained in detail (please!) so that I can work off of it and figure out how to do this on my own.

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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
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The solution is in the form of an excel sheet that shows the Journal entries as well as the closing entries for Pedro Corporation

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Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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