Business, 27.02.2020 19:29 theojw

Jan. 1. Announced a 4-for-1 common stock split, reducing the par value of the common stock to $1.00 per share. Mar. 30. Converted $100,000 face value of convertible bonds payable (the book value of the bond was $103,000) to common stock. Each $1,000 bond converted to 110 shares of common stock. June 1. Acquired equipment with a fair market value of $40,000 in exchange for 200 shares of preffered stock. Sept. 1. Acquired 10,000 shares of common stock for cash at $21 cash per share. Nov. 21 Issued 5,000 shares if common stock at $22 cash per share. Dec. 28. Sold 500 treasury shares at $23 per share. Dec. 31. Closed net income of $150,000 to the Retained Earnings account. Required: a. Set up T-accounts for the stockholders' equity accounts as of the beginning of the year and enter the January 1 balances. b. Prepare journal entries for the given transactions and post them to the T-accounts .

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Answer from: texas101st78

a. stockholder's Equity

DEBIT amount CREDIT amount

1 Jan 600000

bank 160000

bond 103000

bank 110000 balance c/d 973000

bank

stockholder's 160000

stockholder's 110000 balance c/d 270000

preferred stock

1 Jan 500000

equipment 40000

balance c/d 540000

investment

bank 210000 bank 11500

paid in excess 1000

EQUIPMENT

preferred stock 40000 balance c/d 40000

Retained earnings

1 Jan 325000

balance c/d 475000 net income 150000

bond

DEBIT amount CREDIT amount

common stock 103000

paid in excess

balance c/d 1000 investment 1000

b. Journal entries

split shares no entry needed just a memo note

mar 30 Debit bonds 103000 credit stockholder's equity 103000

june 1 Debit equipment 40000 credit preferred stock 40000

Sep 1 Investment 210000 credit bank 210000

Nov 21 bank 110000 credit stockholder's equity 110000

Debit bank 11500 credit investment 10500, credit paid in excess 1000

Debit net income ( income summary) 150000 credit Retained earnings 150000

Explanation:

the missing parts of the question;

The stockholders’ equity of Summit Corporation at January 1 follows:

7 Percent preferred stock, $100 par value, 20,000 shares authorized;

5,000 shares issued and outstanding$500,000

Common stock, $15 par value, 100,000 shares authorized;

40,000 shares issued and outstanding600,000

Paid-in capital in excess of par value—Preferred stock24,000

Paid-in capital in excess of par value—Common stock360,000

Retained earnings325,000

Total Stockholders’ Equity$1,809,000

The following transactions, among others, occurred during the year:

Jan.12Announced a 4-for-1 common stock split, reducing the par value of the common stock to $3.75 per share. The authorization was increased to 400,000 shares.

Mar.31Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock.

June1Acquired equipment with a fair market value of $70,000 in exchange for 500 shares of preferred stock.

Sept.1Acquired 10,000 shares of common stock for cash at $10 per share.

Oct.12Sold 1,500 treasury shares at $12 per share.

Nov.21Issued 5,000 shares of common stock at $11 cash per share.

Dec.28Sold 1,200 treasury shares at $9 per share.

31Closed net income of $95,000 to the Retained Earnings account.

Answer from: Quest

2,283,000

explanation:

i just had to add it

Answer from: Quest

Can you take a photo so i can see the table

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Jan. 1. Announced a 4-for-1 common stock split, reducing the par value of the common stock to $1.00...

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