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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
Cash
Paid-in capital in excess of stated value-common
Common stock
Treasury stock

(1)
Issuance of preferred stock for cash.

(2)
Issuance of common stock for cash.

(3)
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).)

B CORPORATION
Partial Balance Sheet
December 31, 2010

Options:

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.

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