Reference no: EM13346400

The Primo Corporation began operations two years ago and was authorized to issue 500,000 shares of 6%, $100 par value preferred stock and 2,000,000 shares of $5 par value common stock.

The following transactions and events were completed during 2013.

(Note: at the beginning of 2013 there are 1,000 shares of preferred stock and 500,000 shares of common stock) 

Jan. 1 Issued an additional 200,000 shares of common stock for cash at $8 per share. 

Feb. 2 Issued an additional 30,000 shares of preferred stock for cash at $106 per share. 

Mar. 3 Declared a cash dividend on the preferred stock $186,000. 

Apr. 4 Discovered a $50,000 overstatement of 2011 depreciation. 

May 5 Paid the cash dividend declared of March 3. 

June 6 Issued 3,500 shares of common stock for land that was advertised for sale at $35,000. The stock market price of the stock is $9 per share. 

July 7 Declared a 10% stock dividend on common stock when the market value of the stock was $11 per share. (hint: compute the total number of shares of common stock)

Aug. 8 Distributed the stock dividend from July 7

Sept. 9 Primo purchased 4,000 shares of its own common stock at $12 per share. 

Oct. 10 Sold 3,000 shares of treasury stock for $13 per share 

Nov. 11 Declared a $1 cash dividend per share on common stock. (hint: compute the total number of shares of common stock outstanding.) 

Dec. 31 Determined that net income for the year was $650,000.

Instructions

(a) Journalize the transactions listed above.

(b) Post only the stockholder's equity accounts.

(c) Prepare a retained earnings statement for the year.

(d) Prepare a stockholders' equity section at December 31, 2013.