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Prepare Journal Entries: Issuance, Common & Purchase Stock

B Corporation has been authorized to issue 24,500 shares of $100 par value, 10%, noncumulative preferred stock and 1,071,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2010, the ledger contained the following balances pertaining to stockholders' equity.

Preferred Stock $166,400
Paid-in Capital in Excess of Par Value-Preferred Stock 20,710
Common Stock 2,129,000
Paid-in Capital in Excess of Stated Value-Common Stock 1,724,500
Treasury Stock-Common (5,550 shares) 61,050
Retained Earnings 82,400

The preferred stock was issued for $187,110 cash. All common stock issued was for cash. In November 5,550 shares of common stock were purchased for the treasury at a per share cost of $11. No dividends were declared in 2010.

(a) Prepare the journal entries for the following. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Options are as follows:

Account/Description Debit Credit:

Preferred stock
Paid-in capital in excess of par value-preferred
Retained earnings
Paid-in capital in excess of stated value-common
Common stock
Treasury stock

Issuance of preferred stock for cash.

Issuance of common stock for cash.

Purchase of common treasury stock for cash.

Second part of Question:

Complete the stockholdersâ?? equity section of the balance sheet at December 31, 2010. (If amount should be deducted please put either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

Partial Balance Sheet
December 31, 2010


In excess of stated value-common stock
Common stock
Retained earnings
Treasury stock
10% Preferred stock
In excess of par value-preferred stock

1.Stockholdersâ?? equity
Paid-in capital
Capital stock

$100 par value, noncumulative,

_______shares authorized
________shares issued and outstanding $ _____________

no par, $ 5 stated value
________shares authorized
________shares issued
and________shares $_______________

OUTSTANDING $_______________

Total capital stock $__________

Additional paid-in capital

___________________ $________________

___________________ $_________________

Total additional paid-in capital $________________

Total Paid in Capital $________________

__________________ $_______________

Total Paid-in capital and retained earnings $________________

Less: ________________
________________ (common shares) $________________

Total stockholder's equity $_________________

Solution Summary

The expert prepares journal entries for issuance, common and purchase stocks.