Reference no: EM132055293

Question - The stockholders equity accounts of Castle Corporation on Jan. 1, 2015 were as follows

Preferred Stock (8%, $50 par, cumulative, 10,000 shares authorized) $400,000

Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000

Paid-in Capital in Excess of Par- Preferred Stock 100,000

Paid in Capital in Excess of stated Value- common stock 1,450.000

Retained earnings 1,816.000

Treasury stock (10,000 common shares) 50,000

During 2015 the corporation had the following transactions and events pertaining to its stockholders equity.

Feb 1 Issued 25,000 shares of common stock for $120,000

Apr. 14 Sold 6,000 shares of treasury stock- common stock for $33,000

Sep 3. Issued 5,000 shares of common stock for a patent valued at $35,000

Nov 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000 dec 31 Determined that net income for the year was $452,000

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 j5 for the posting reference)

c) Prepare a stockholders equity section at Dec 31, 2015, including the disclosure of the preferred dividends in arrears.