Reference no: EM131975645

Problem

The shareholders' equity section of Superior Corporation's balance sheet as of December 31, 2012, is as follows: Shareholders' Equity Preferred stock, $100 par value; authorized, 150,000 shares; issued, 15,000 shares $1,500,000 Common stock, $5 par value; authorized, 1,000,000 shares; issued, 200,000 shares 1,000,000 Paid-in capital in excess of par-preferred 75,000 Paid-in capital in excess of par-common 425,000 Retained earnings 3,000,000 $6,000,000 The following events occurred during 2013: Jan. 5 10,000 shares of authorized and unissued common stock were sold for $10 per share. Jan. 16 10,000 shares of authorized and unissued preferred stock were sold for $108 per share. April 1 80,000 shares of common stock were repurchased for the treasury at a price of $15 per share. Superior uses the cost method to account for treasury stock. Sept. 1 4,000 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $439,000. The preferred stock currently trades on the New York Stock exchange at a price of $108 per share. Dec. 1 30,000 shares of treasury stock are reissued at a price of $20 per share.

1. Prepare journal entries for each of the above transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2013. Authorized common shares.

3. Calculate Superior's legal capital at December 31, 2013.