Question

Selected Stock Transactions Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois....

Selected Stock Transactions

Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication at the beginning of the current year:

Preferred 2% Stock, $200 par (60,000 shares authorized, 30,000 shares issued) $6,000,000
Paid-In Capital in Excess of Par—Preferred Stock 720,000
Common Stock, $20 par (500,000 shares authorized, 210,000 shares issued) 4,200,000
Paid-In Capital in Excess of Par—Common Stock 550,000
Retained Earnings 24,316,000

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

  1. Purchased 30,000 shares of treasury common for $25 per share.
  2. Sold 15,000 shares of treasury common for $28 per share.
  3. Issued 15,000 shares of preferred 2% stock at $219.
  4. Issued 50,000 shares of common stock at $25, receiving cash.
  5. Sold 10,000 shares of treasury common for $23 per share.
  6. Declared cash dividends of $4.00 per share on preferred stock and $0.08 per share on common stock.
  7. Paid the cash dividends.

Required:

Journalize the entries to record the transactions.

If an amount box does not require an entry, leave it blank.

a. Treasury Stock      
Cash
b. Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock
c. Cash
Preferred Stock
Paid-In Capital in Excess of Par-Preferred Stock
d. Cash
Common Stock
Paid-In Capital in Excess of Par-Common Stock
e. Cash
Paid-In Capital from Sale of Treasury Stock
Treasury Stock
f. Cash Dividends
Cash Dividends Payable
g. Cash Dividends Payable
Cash
Business   Accounting   
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Homework Answers

Answer #1
a. Treasury Stock 750000 =30000*25
Cash 750000
b. Cash 420000 =15000*28
Treasury Stock 375000 =15000*25
Paid-In Capital from Sale of Treasury Stock 45000
c. Cash 3285000 =15000*219
Preferred Stock 3000000 =15000*200
Paid-In Capital in Excess of Par-Preferred Stock 285000
d. Cash 1250000 =50000*25
Common Stock 1000000 =50000*20
Paid-In Capital in Excess of Par-Common Stock 250000
e. Cash 230000 =10000*23
Paid-In Capital from Sale of Treasury Stock 20000
Treasury Stock 250000 =10000*25
f. Cash Dividends 200400 =(30000+15000)*4+(210000-30000+15000+50000+10000)*0.08
Cash Dividends Payable 200400
g. Cash Dividends Payable 200400
Cash 200400
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