Reference no: EM133159461
Question - Lebel Corporation has the following capital structure at the beginning of the year:
Preferred shares, $3, no par value, 20,000 shares authorized,
6,000 shares issued and outstanding $ 300,000
Common shares, no par value, 60,000 shares authorized,
40,000 shares issued and outstanding 510,000
Contributed Surplus- Preferred shares 63,000
Total contributed capital 873,000
Retained earnings 340,000
Total shareholders' equity $1,213,000
Required - Record the following transactions which occurred consecutively (show all calculations).
1. A total cash dividend of $90,000 was declared and payable to shareholders of record. The preferred shares are non-cumulative and fully participating. Record the dividends payable on common and preferred shares in separate accounts.
2. A 10% common stock dividend was declared and distributed. The average market value of the common shares is $16 a share.
3. Issued 8,500 common shares for a building appraised at $140,000, while the market value of the shares were still trading at $16 per share.
4. Purchased and cancelled 18,000 common shares for $9.75.
5. Purchased and cancelled 1,000 preferred shares for $59.50.