Stockholders Equity Section
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Instructions Prepare the journal entries for the Sagan Co. transactions.
Journalize preferred stock transactions and indicate statement presentation. (LO 2, 4), AP
E113 Penland Corporation is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock.
Feb. 1 Issued 40,000 shares for cash at $51 per share. July 1 Issued 60,000 shares for cash at $56 per share.
Instructions (a) Journalize the transactions. (b) Post to the stockholders' equity accounts. (Use T‐accounts.) (c) Discuss the statement presentation of the accounts.
Answer questions about stockholders' equity section. (LO 2, 4), C
E114 The stockholders' equity section of Lachlin Corporation's balance sheet at December 31 is presented here.
Instructions From a review of the stockholders' equity section, answer the following questions. (a) How many shares of common stock are outstanding? (b) Assuming there is a stated value, what is the stated value of the common stock? (c) What is the par value of the preferred stock? (d) If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred
stock?
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(e) If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?
Prepare correct entries for capital stock transactions. (LO 2), AN
E115 Mesa Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation's capital stock.
Instructions On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions.
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