Reference no: EM133057750
Question 1 - Cullumber Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders' equity.
Preferred Stock, 136,700 shares $2,734,000
Common Stock, 1,977,000 shares 9,885,000
Paid-in Capital in Excess of Par-Preferred Stock 201,000
Paid-in Capital in Excess of Par-Common Stock 26,668,000
Retained Earnings 4,584,000
The following transactions affected stockholders' equity during 2021.
Jan. 1 31,300 shares of preferred stock issued at $22 per share.
Feb. 1 48,400 shares of common stock issued at $19 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,100 shares of common treasury stock purchased at $11 per share. Cullumber uses the cost method.
Sept. 15 10,100 shares of treasury stock reissued at $12 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of 48¢ per share is declared.
Dec. 31 Net income is $2,104,000.
Required - Prepare the stockholders' equity section for Cullumber Company at December 31, 2021.
Question 2 - Pearl Corporation's charter authorized issuance of 96,000 shares of $10 par value common stock and 45,800 shares of $50 preferred stock. The following transactions involving the issuance of shares of stock were completed. Each transaction is independent of the others.
1. Issued a $10,600, 9% bond payable at par and gave as a bonus one share of preferred stock, which at that time was selling for $115 a share.
2. Issued 450 shares of common stock for equipment. The equipment had been appraised at $7,700; the seller's book value was $5,700. The most recent market price of the common stock is $16 a share.
3. Issued 339 shares of common and 93 shares of preferred for a lump sum amounting to $10,100. The common had been selling at $14 and the preferred at $66.
4. Issued 220 shares of common and 54 shares of preferred for equipment. The common had a fair value of $16 per share; the equipment has a fair value of $7,100.
Required - Record the transactions listed above in journal entry form.