Acc557 Financial Accounting: P11-3A The stockholders' equity accounts of Terrell Corporation

Acc557 Financial Accounting

Problem 11-3A
The stockholders' equity accounts of Terrell Corporation on January 1, 2014, were as follows.
Preferred Stock (9%, $50 par, cumulative, 10,000 shares authorized) 400,000
Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000
Paid-in Capital in Excess of Par-Preferred Stock 100,000
Paid-in Capital in Excess of Stated Value-Common Stock 1,450,000
Retained Earnings 1,816,000
Treasury Stock (20,000 common shares) 50,000

During 2014, the corporation had the following transactions and events pertaining to its stockholders' equity.
Feb. 1 Issued 25,000 shares of common stock for $120,000.
Apr. 14 Sold 9,000 shares of treasury stock-common for $46,000.
Sept. 3 Issued 7,000 shares of common stock for a patent valued at $42,000.
Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000.
Dec. 31 Determined that net income for the year was $452,000.
No dividends were declared during the year.

Instructions:
a. Journalize the transactions and the closing entry for net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
b. Enter the beginning balances in the accounts, and post the journal entries to the stockholders' equity accounts. (Use J5 for the posting reference.)(Post entries in the order of journal entries presented in the previous part.)
c. Prepare a stockholders' equity section at December 31, 2014.
Powered by