Reference no: EM131134222

The stockholders' equity accounts of Miles Corporation on January 1, 2010, were as follows.

Preferred Stock (10%, $100 par, noncumulative, 5,000 shares authorized) . $ 300,000
Common Stock ($5 stated value, 300,000 shares authorized) ....... 1,000,000
Paid-in Capital in Excess of Par Value-Preferred Stock ......... 20,000
Paid-in Capital in Excess of Stated Value-Common Stock ........ 425,000
Retained Earnings ....................... 488,000
Treasury Stock-Common (5,000 shares) ............... 40,000

During 2010, the corporation had the following transactions and events pertaining to its stockholders' equity.

Feb. 1 Issued 3,000 shares of common stock for $25,500.

Mar. 20 Purchased 1,500 additional shares of common treasury stock at $8 per share.

June 14 Sold 4,000 shares of treasury stock-common for $36,000.

Sept. 3 Issued 2,000 shares of common stock for a patent valued at $19,000.

Dec. 31 Determined that net income for the year was $350,000.

Instructions

(a) Journalize the transactions and the closing entry for net income.

(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts. (Use J1 as the posting reference.)

(c) Prepare a stockholders' equity section at December 31, 2010.