Reference no: EM132466166

Question (a) Record the journal entries for the transactions listed above.

Question (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2014.

(Equity Transactions and Statement Preparation) On January 5, 2014, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions.

• Jan. 11 Issued 20,000 shares of common stock at $16 per share.
• Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipment with a fair value of $50,000; a factory building with a fair value of $160,000; and land with an appraised value of $270,000. J
• uly 29 Purchased 1,800 shares of common stock at $17 per share. (Use cost method.)
•  Aug. 10 Sold the 1,800 treasury shares at $14 per share.
•  Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend.
• Dec. 31 Closed the Income Summary account. There was a $175,700 net income.