ADMS 2500 Lecture Notes - Accounts Receivable, Retained Earnings, Stock Split
ADMS 2500 Full Course Notes
Get access
Related Documents
Related Questions
Common Stock Issuance, Treasury Stock, Preferred Stock,Dividends, Comprehensive Income, Disclosure. Castleline,Inc. reported the following shareholdersâ equity section as of thebeginning of the current year:
Stockholder's Equity
Contributed Capital: | |
Common Stock, $1 Par Value, 3,850,000 shares authorized,905,000 shares issued, and 821,500 shares outstanding | $905,000 |
Additional Paid-in Capital in Excess of Par-Common | 22,625,000 |
Total Contributed Capital: | $23,530,000 |
Retained Earnings: | $8,957,450 |
Accumulated Other Comprehensive Income | 1,057,600 |
Less: Treasury Stock (83,500 common stock shares at cost) | (1,670,000) |
Total Stockholders Equity: | $31,875,050 |
During the current year, Castleline engaged in the followingtransactions affecting the stockholdersâ equity section of itscurrent balance sheet.
Issued 400,000 shares of its $1 par value common stock at $31per share. The underwriter charged a 3% fee for issuing the shares.The stock issue costs are not capitalized.
Issued 500,000 shares of $10 par value 6% preferred stock(2,550,000 authorized) at $40 per share. These shares wereprivately placed and Castleline did not pay stock issue costs.
Purchased 220,000 shares of common stock at $32 per share.
Declared a $450,000 dividend for the first half of the year.(The declarations should be recorded separately for the common andthe preferred shares.)
Sold 105,000 of the treasury shares at $44 per share. (The83,500 treasury shares on hand at the beginning of the year areconsidered sold first. The company paid $20 per share for theseshares of treasury stock).
Paid the cash dividends.
Reported net income of $3,180,500 for the current year.
In addition to the net income, Castleline incurred an $801,000unrealized loss on an available-for-sale investment.
Declared a $450,000 cash dividend for the second half of theyear. (The declarations should be recorded separately for thecommon and the preferred shares.)
Closed out all dividends and other comprehensive incomeaccounts.
Required »
Prepare all journal entries required to record the transactionslisted above.