problem 15 1 Week 2
On April 21, 2014, Alligator Corporation received a charter granting the right to issue 100,000 shares of $100 par value, 6% cumulative and nonparticipating preferred stock, and 1,000,000 shares of $1 par value common stock. It then
Apr. 28 Issued 100,000 shares of common stock at $23 per share.
Jul. 16 Issued 6,000 shares of preferred stock to The Venot Corporation for the following assets: equipment with a fair value of $76,000; a warehouse with a fair value of $240,000; and land with an appraised value of $320,000.
Aug 6 Purchased 750 shares of common stock at $26 per share. (Use cost method.)
Sep. 17 Sold the 750 treasury shares at $27 per share.
Dec. 31 Declared a $0.10 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31 Closed the Income Summary account. There was a $96,900 net income.
Instructions
(a) Record the journal entries for the transactions listed above.
(b) Prepare the stockholders’ equity section of Alligator Corporation’s balance sheet as of December 31, 2014.
April 28
Cash 2,300,000 Common Stock 100,000 Paid-in Capital in Excess of Par—Common 2,200,000
July 16
Equipment 76,000
Warehouse 240,000
Land 320,000 Preferred Stock (4,000 X $100) 600,000 Paid-in Capital in Excess of Par—Preferred 36,000
August 6
Treasury Stock 19,500 Cash 19,500
September 17
Cash 20,250 Retained Earnings 750 Treasury Stock 19,500
December 31
Retained Earnings 46,000 Cash Dividend Payable—Common 10,000 Cash Dividend Payable—Preferred 36,000
December 31
Income Summary 96,900 Retained Earnings 96,900
ALLIGATOR CORPORATION
Stockholders’ Equity
December 31, 2014
Capital stock Preferred stock—par value $100 per share, 6% cumulative and nonparticipating, 100,000 shares authorized, 6,000 shares issued and outstanding $600,000 Common stock—par value $5 per share, 1,000,000 shares authorized, 100,000 shares issued and outstanding 100,000 Total
Apr. 28 Issued 100,000 shares of common stock at $23 per share.
Jul. 16 Issued 6,000 shares of preferred stock to The Venot Corporation for the following assets: equipment with a fair value of $76,000; a warehouse with a fair value of $240,000; and land with an appraised value of $320,000.
Aug 6 Purchased 750 shares of common stock at $26 per share. (Use cost method.)
Sep. 17 Sold the 750 treasury shares at $27 per share.
Dec. 31 Declared a $0.10 per share cash dividend on the common stock and declared the preferred dividend.
Dec. 31 Closed the Income Summary account. There was a $96,900 net income.
Instructions
(a) Record the journal entries for the transactions listed above.
(b) Prepare the stockholders’ equity section of Alligator Corporation’s balance sheet as of December 31, 2014.
April 28
Cash 2,300,000 Common Stock 100,000 Paid-in Capital in Excess of Par—Common 2,200,000
July 16
Equipment 76,000
Warehouse 240,000
Land 320,000 Preferred Stock (4,000 X $100) 600,000 Paid-in Capital in Excess of Par—Preferred 36,000
August 6
Treasury Stock 19,500 Cash 19,500
September 17
Cash 20,250 Retained Earnings 750 Treasury Stock 19,500
December 31
Retained Earnings 46,000 Cash Dividend Payable—Common 10,000 Cash Dividend Payable—Preferred 36,000
December 31
Income Summary 96,900 Retained Earnings 96,900
ALLIGATOR CORPORATION
Stockholders’ Equity
December 31, 2014
Capital stock Preferred stock—par value $100 per share, 6% cumulative and nonparticipating, 100,000 shares authorized, 6,000 shares issued and outstanding $600,000 Common stock—par value $5 per share, 1,000,000 shares authorized, 100,000 shares issued and outstanding 100,000 Total