Reference no: EM132527581

Question - Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders' equity occurred in the first two years of the company's operations.

2018 -

Jan. 1 Authorized the issuance of 2 million shares of $5 par value common stock and 100,000 shares of $100 par value, 10% cumulative, preferred stock.

Jan. 2 Issued 200,000 shares of common stock for $12 cash per share.

Jan. 3 Issued 100,000 shares of common stock in exchange for a building valued at $820,000 and merchandise inventory valued at $380,000.

Jan. 4 Paid $10,000 cash to the company's founders for organization activities.

Jan. 5 Issued 12,000 shares of preferred stock for $110 cash per share.

2019 -

June 4 Issued 100,000 shares of common stock for $15 cash per share.

Required -

1. Prepare journal entries to record these transactions.

2. Prepare calculation showing dividend allocations and dividends per share for 2018 and 2019 assuming Tony declares the following cash dividends: 2018, $50,000, and 2019, $300,000.