On January 2, 2015, ABC Co. was authorized to issue 300,000shares of common stock, par value $10 per share and 50,000 sharesof 6% Preferred stock, par value $100 per share. Record thefollowing events for 2015:
1. Issued 100,000 shares of common stock at $15 per share.
Debit Credit
2. Issued 11,000 shares of preferred stock at $105 pershare.
Debit Credit
3. Reacquired 2,000 shares of common stock at $18 per share.
Debit Credit
4. Reissued 500 shares of treasury stock for $10,000.
Debit Credit
5. Declared the annual cash dividend on the preferred stock anda $1 per share dividend on the
common stock. This will be paid the followingyear.
Debit Credit
On January 2, 2015, ABC Co. was authorized to issue 300,000shares of common stock, par value $10 per share and 50,000 sharesof 6% Preferred stock, par value $100 per share. Record thefollowing events for 2015:
1. Issued 100,000 shares of common stock at $15 per share.
Debit Credit
2. Issued 11,000 shares of preferred stock at $105 pershare.
Debit Credit
3. Reacquired 2,000 shares of common stock at $18 per share.
Debit Credit
4. Reissued 500 shares of treasury stock for $10,000.
Debit Credit
5. Declared the annual cash dividend on the preferred stock anda $1 per share dividend on the
common stock. This will be paid the followingyear.
Debit Credit
Related questions
1. A company purchases 1,000 shares of its $10 par value common stock when the market price per share is $25. The entry to record the treasury stock purchase is:
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2. Tri-City Corporation reports on its balance sheet 1,000 shares of $100 par value, 5%, cumulative, preferred stock; 6,000 shares issued, 5,000 outstanding, of $10 par value common stock; Additional Paid-in Capital, Common of $40,000; 1,000 shares of Treasury Stock, Common at $10,000; and Retained Earnings of $80,000. The preferred shares are callable at $110, and no dividends are in arrears.
The book value per share of Tri-City's common stock is
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3.Johanna Corporation issues 1,000 shares of $20 par value stock for $50,000. The entry to record the stock issue is:
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Problem 15-3
Hatch Company has two classes of capital stock outstanding: 7%,$20 par preferred and $5 par common. At December 31, 2014, thefollowing accounts were iHatch Company has two classes of capitalstock outstanding: 7%, $20 par preferred and $5 par common. AtDecember 31, 2014, the following accounts were included instockholdersâ equity.
| Preferred Stock, 151,800 shares | $ 3,036,000 | |
| Common Stock, 2,120,000 shares | 10,600,000 | |
| Paid-in Capital in Excess of ParâPreferred Stock | 203,700 | |
| Paid-in Capital in Excess of ParâCommon Stock | 27,240,000 | |
| Retained Earnings | 4,547,000 |
The following transactions affected stockholdersâ equity during2015.
| Jan. 1 | 40,300 shares of preferred stock issued at $22 per share. | |
| Feb. 1 | 53,500 shares of common stock issued at $21 per share. | |
| June 1 | 2-for-1 stock split (par value reduced to $2.50). | |
| July 1 | 39,700 shares of common treasury stock purchased at $9 pershare. Hatch uses the cost method. | |
| Sept. 15 | 10,600 shares of treasury stock reissued at $11 per share. | |
| Dec. 31 | The preferred dividend is declared, and a common dividend of55¢ per share is declared. | |
| Dec. 31 | Net income is $2,279,000. |
Prepare the stockholdersâ equity section for Hatch Company atDecember 31, 2015.
