Balance Account Debit Credit Cash (from stock and for dividends paid) Subscriptions Receivable: Common Stock Subscriptions Receivable: Preferred Stock Equipment Preferred Stock Subscribed (for 300 shares) 8% Preferred Stock, $100 par (2,300 shares) Additional Paid-in Capital on Preferred Stock Common Stock Subscribed (2,000 shares) Common Stock, $5 stated value (9,000 shares) Additional Paid-in Capital on Common Stock Retained Earnings $250,000 14,000 33,600 69,000 $ 30,000 230,000 33,000 10,000 45,000 46,000 2,600 During the first year, the following events occurred: 1. Subscription contracts were entered into for common stock at $9 per share and preferred stock at $112 per share. Common stock subscriptions required a $2-per-share down payment. Preferred stock subscrip- tions required no down payment. Shares (either common or preferred) were issued to subscribers upon full payment. 2. One thousand shares of common stock were sold for $11 per share, and the stock was issued to shareholders. 3. Equipment with an appraised value of $69,000 was acquired by issuing 600 shares of preferred stock. The appraised value of the equipment was used to record the transaction. 4. Net income of $30,000 was closed to Retained Earnings from Income Summary at the end of the year. 5. Dividends of $8 per share on all the preferred stock outstanding and $1 per share on all the common stock outstanding were distributed at the end of the year (the company debited Retained Earnings and credited Cash for each dividend).
Balance Account Debit Credit Cash (from stock and for dividends paid) Subscriptions Receivable: Common Stock Subscriptions Receivable: Preferred Stock Equipment Preferred Stock Subscribed (for 300 shares) 8% Preferred Stock, $100 par (2,300 shares) Additional Paid-in Capital on Preferred Stock Common Stock Subscribed (2,000 shares) Common Stock, $5 stated value (9,000 shares) Additional Paid-in Capital on Common Stock Retained Earnings $250,000 14,000 33,600 69,000 $ 30,000 230,000 33,000 10,000 45,000 46,000 2,600 During the first year, the following events occurred: 1. Subscription contracts were entered into for common stock at $9 per share and preferred stock at $112 per share. Common stock subscriptions required a $2-per-share down payment. Preferred stock subscrip- tions required no down payment. Shares (either common or preferred) were issued to subscribers upon full payment. 2. One thousand shares of common stock were sold for $11 per share, and the stock was issued to shareholders. 3. Equipment with an appraised value of $69,000 was acquired by issuing 600 shares of preferred stock. The appraised value of the equipment was used to record the transaction. 4. Net income of $30,000 was closed to Retained Earnings from Income Summary at the end of the year. 5. Dividends of $8 per share on all the preferred stock outstanding and $1 per share on all the common stock outstanding were distributed at the end of the year (the company debited Retained Earnings and credited Cash for each dividend).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
At the end of its frrst year of operations, Leo Company lists the following accounts and ending account balances related to stock transactions and dividends: On the basis of the preceding information, reconstruct all the
Transcribed Image Text:Balance
Account
Debit
Credit
Cash (from stock and for dividends paid)
Subscriptions Receivable: Common Stock
Subscriptions Receivable: Preferred Stock
Equipment
Preferred Stock Subscribed (for 300 shares)
8% Preferred Stock, $100 par (2,300 shares)
Additional Paid-in Capital on Preferred Stock
Common Stock Subscribed (2,000 shares)
Common Stock, $5 stated value (9,000 shares)
Additional Paid-in Capital on Common Stock
Retained Earnings
$250,000
14,000
33,600
69,000
$ 30,000
230,000
33,000
10,000
45,000
46,000
2,600
During the first year, the following events occurred:
1. Subscription contracts were entered into for common stock at $9 per share and preferred stock at $112
per share. Common stock subscriptions required a $2-per-share down payment. Preferred stock subscrip-
tions required no down payment. Shares (either common or preferred) were issued to subscribers upon full
payment.
2. One thousand shares of common stock were sold for $11 per share, and the stock was issued to shareholders.
3. Equipment with an appraised value of $69,000 was acquired by issuing 600 shares of preferred stock. The
appraised value of the equipment was used to record the transaction.
4. Net income of $30,000 was closed to Retained Earnings from Income Summary at the end of the year.
5. Dividends of $8 per share on all the preferred stock outstanding and $1 per share on all the common stock
outstanding were distributed at the end of the year (the company debited Retained Earnings and credited
Cash for each dividend).
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