Question

Refer to the following transactions.

1. Sold 4,400 shares of $44 par value 7% preferred stock at par.
2. Declared the annual dividend on the preferred stock.
3. Purchased 550 shares of preferred stock for the treasury at $53 per share.
4. Issued 1,500 shares of $2 par value common stock in exchange for land valued at $116,000.
5. Sold 262 shares of the treasury stock purchased in transaction c for $57 per share.
6. Split the common stock 2-for-1.

Transaction	Cash	Other Assets	Liabilities	Paid-in Capital	Retained Earnings	Treasury Stock	Net Income
a.
b.
c.
d.
e.
f.

Answer 1

Answer:

Transaction	Cash	Other assets	Liabilities	Paid in capital	Retained Earnings	Treasurt Stock
a	193600			193600
b			13552		-13832
c	-29150					-29150
d		116000		116000
e	14934			1048		13886
f	No entry is required for a stock split

workings:

Transaction	Cash	Other assets	Liabilities	Paid in capital	Retained Earnings	Treasurt Stock
a	=4400*44			=4400*44
b			=193600*0.07		=197600*-0.07
c	=-550*53					=550*53
d		116000		116000
e	=262*57			=262*(57-53)		=262*53
f	No entry is required for a stock split