Common Stock Issuance, Treasury Stock, Preferred Stock,Dividends, Comprehensive Income, Disclosure. Castleline,Inc. reported the following shareholdersâ equity section as of thebeginning of the current year:
Stockholder's Equity
Contributed Capital: Common Stock, $1 Par Value, 3,850,000 shares authorized,905,000 shares issued, and 821,500 shares outstanding $905,000 Additional Paid-in Capital in Excess of Par-Common 22,625,000 Total Contributed Capital: $23,530,000 Retained Earnings: $8,957,450 Accumulated Other Comprehensive Income 1,057,600 Less: Treasury Stock (83,500 common stock shares at cost) (1,670,000) Total Stockholders Equity: $31,875,050
During the current year, Castleline engaged in the followingtransactions affecting the stockholdersâ equity section of itscurrent balance sheet.
Issued 400,000 shares of its $1 par value common stock at $31per share. The underwriter charged a 3% fee for issuing the shares.The stock issue costs are not capitalized.
Issued 500,000 shares of $10 par value 6% preferred stock(2,550,000 authorized) at $40 per share. These shares wereprivately placed and Castleline did not pay stock issue costs.
Purchased 220,000 shares of common stock at $32 per share.
Declared a $450,000 dividend for the first half of the year.(The declarations should be recorded separately for the common andthe preferred shares.)
Sold 105,000 of the treasury shares at $44 per share. (The83,500 treasury shares on hand at the beginning of the year areconsidered sold first. The company paid $20 per share for theseshares of treasury stock).
Paid the cash dividends.
Reported net income of $3,180,500 for the current year.
In addition to the net income, Castleline incurred an $801,000unrealized loss on an available-for-sale investment.
Declared a $450,000 cash dividend for the second half of theyear. (The declarations should be recorded separately for thecommon and the preferred shares.)
Closed out all dividends and other comprehensive incomeaccounts.
Required »
Prepare all journal entries required to record the transactionslisted above.
Common Stock Issuance, Treasury Stock, Preferred Stock,Dividends, Comprehensive Income, Disclosure. Castleline,Inc. reported the following shareholdersâ equity section as of thebeginning of the current year:
Stockholder's Equity
| Contributed Capital: | |
| Common Stock, $1 Par Value, 3,850,000 shares authorized,905,000 shares issued, and 821,500 shares outstanding | $905,000 |
| Additional Paid-in Capital in Excess of Par-Common | 22,625,000 |
| Total Contributed Capital: | $23,530,000 |
| Retained Earnings: | $8,957,450 |
| Accumulated Other Comprehensive Income | 1,057,600 |
| Less: Treasury Stock (83,500 common stock shares at cost) | (1,670,000) |
| Total Stockholders Equity: | $31,875,050 |
During the current year, Castleline engaged in the followingtransactions affecting the stockholdersâ equity section of itscurrent balance sheet.
Issued 400,000 shares of its $1 par value common stock at $31per share. The underwriter charged a 3% fee for issuing the shares.The stock issue costs are not capitalized.
Issued 500,000 shares of $10 par value 6% preferred stock(2,550,000 authorized) at $40 per share. These shares wereprivately placed and Castleline did not pay stock issue costs.
Purchased 220,000 shares of common stock at $32 per share.
Declared a $450,000 dividend for the first half of the year.(The declarations should be recorded separately for the common andthe preferred shares.)
Sold 105,000 of the treasury shares at $44 per share. (The83,500 treasury shares on hand at the beginning of the year areconsidered sold first. The company paid $20 per share for theseshares of treasury stock).
Paid the cash dividends.
Reported net income of $3,180,500 for the current year.
In addition to the net income, Castleline incurred an $801,000unrealized loss on an available-for-sale investment.
Declared a $450,000 cash dividend for the second half of theyear. (The declarations should be recorded separately for thecommon and the preferred shares.)
Closed out all dividends and other comprehensive incomeaccounts.
Required »
Prepare all journal entries required to record the transactionslisted above.
Related questions
ACT5725
The stockholders' equity of Verrecchia Company at December 31, 2016, follows:
| Common stock, $5 par value, 500,000 shares authorized; 350,000 shares issued and outstanding | $1,750,000 |
| Paid-in capital in excess of par value | 800,000 |
| Retained earnings | 634,000 |
During 2017, the following transactions occurred:
Jan. 5 Issued 10,000 shares of common stock for $13 cash per share.
Jan. 18 Repurchased 4,000 shares of common stock at $16 cash per share.
Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share.
July 17 Sold 500 shares of treasury stock for $14 cash per share.
Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $36 cash per share. This is the first issuance of preferred shares from the 50,000 authorized preferred shares.
(a) Use the financial statement effects template to indicate the effects of each transaction.
Use negative signs with answers, when appropriate.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
| Jan. 5 | Answer | Answer | Answer | Answer | Answer | |||||
| Jan. 18 | Answer | Answer | Answer | Answer | Answer | |||||
| Mar. 12 | Answer | Answer | Answer | Answer | Answer | |||||
| July. 17 | Answer | Answer | Answer | Answer | Answer | |||||
| Oct. 1 | Answer | Answer | Answer | Answer | Answer | |||||
| Income Statement | |||||
|---|---|---|---|---|---|
| Revenue | - | Expenses | = | Net Income | |
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
(b) Prepare the December 31, 2017, stockholders' equity section of the balance sheet assuming that the company reports net income of $76,900 for the year.
Use a negative sign with your answer for treasury stock.
| Stockholders' Equity | ||
|---|---|---|
| Paid-in capital | ||
| 8% Preferred stock, $25 par value, 50,000 shares authorized, 5,000 shares issued and outstanding | $Answer | |
| Common stock, $5 par value, 500,000 shares authorized; 360,000 shares issued | Answer | $Answer |
| Additional Paid-in capital | ||
| Paid-in capital in excess of par value-preferred stock | Answer | |
| Paid-in capital in excess of par value-common stock | Answer | |
| Paid-in capital from treasury stock | Answer | Answer |
| Total paid-in capital | Answer | |
| Retained earnings | Answer | |
| Answer | ||
| Less: Treasury stock (2,500 shares) at cost (use a negative sign with answer) | Answer | |
| Total Stockholders' Equity | $Answer | |
act5725
The stockholders' equity of Verrecchia Company at December 31, 2016, follows:
| Common stock, $5 par value, 500,000 shares authorized; 350,000 shares issued and outstanding | $1,750,000 |
| Paid-in capital in excess of par value | 800,000 |
| Retained earnings | 634,000 |
During 2017, the following transactions occurred:
Jan. 5 Issued 10,000 shares of common stock for $13 cash per share.
Jan. 18 Repurchased 4,000 shares of common stock at $16 cash per share.
Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share.
July 17 Sold 500 shares of treasury stock for $14 cash per share.
Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $36 cash per share. This is the first issuance of preferred shares from the 50,000 authorized preferred shares.
(a) Use the financial statement effects template to indicate the effects of each transaction.
Use negative signs with answers, when appropriate.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
| Jan. 5 | Answer | Answer | Answer | Answer | Answer | |||||
| Jan. 18 | Answer | Answer | Answer | Answer | Answer | |||||
| Mar. 12 | Answer | Answer | Answer | Answer | Answer | |||||
| July. 17 | Answer | Answer | Answer | Answer | Answer | |||||
| Oct. 1 | Answer | Answer | Answer | Answer | Answer | |||||
| Income Statement | |||||
|---|---|---|---|---|---|
| Revenue | - | Expenses | = | Net Income | |
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
| Answer | Answer | Answer | |||
(b) Prepare the December 31, 2017, stockholders' equity section of the balance sheet assuming that the company reports net income of $76,900 for the year.
Use a negative sign with your answer for treasury stock.
| Stockholders' Equity | ||
|---|---|---|
| Paid-in capital | ||
| 8% Preferred stock, $25 par value, 50,000 shares authorized, 5,000 shares issued and outstanding | $Answer | |
| Common stock, $5 par value, 500,000 shares authorized; 360,000 shares issued | Answer | $Answer |
| Additional Paid-in capital | ||
| Paid-in capital in excess of par value-preferred stock | Answer | |
| Paid-in capital in excess of par value-common stock | Answer | |
| Paid-in capital from treasury stock | Answer | Answer |
| Total paid-in capital | Answer | |
| Retained earnings | Answer | |
| Answer | ||
| Less: Treasury stock (2,500 shares) at cost (use a negative sign with answer) | Answer | |
| Total Stockholders' Equity | $Answer | |
