Reference no: EM132289020

Question - On January 1, 2018, Cardi Corp. had the following balances (all balances are normal):

Accounts Amount

Preferred Stock, ($100 par value, 4% noncumulative, 50,000 shares authorized, 6,000 shares issued and outstanding) $600,000

Common Stock ($5 par value, 200,000 shares authorized, 100,000 shares issued and outstanding) $500,000

Paid-in Capital in Excess of par, Common 200,000

Retained Earnings 900,000

The following events occurred during 2018:

1. On January 1, Cardi Corp. declared a 3% stock dividend on its common stock when the market value of the common stock was $11 per share. Stock dividends were distributed on January 31 to shareholders as of January 25.

2. On February 15, Cardi Corp. reacquired 500 shares of common stock for $13 each.

3. On March 31, Cardi Corp. reissued 250 shares of treasury stock for $18 each.

4. On July 1, Cardi Corp. reissued 250 shares of treasury stock for $10 each.

5. On October 1, Cardi Corp. declared full year dividends for preferred stock and $2.00 cash dividends for outstanding shares and paid shareholders on October 15.

6. On December 15, Cardi Corp. split common stock 2 shares for 1.

7. Net Income for 2018 was $300,000.

Requirements:

1. Prepare journal entries for the transactions listed above.

2. Prepare a Stockholders' section of a classified balance sheet as of December 31, 2018 (after taking into consideration your journal entries).