icon corporation was organized during 2010 at the end of 246058

Icon Corporation was organized during 2010. At the end of 2011, the equity section of its balance sheet appeared as follows:

Contributed capital:

Preferred stock (6%, $20 par, 10,000 shares authorized,

5,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$100,000

Common stock ($10 par, 50,000 shares authorized,

11,000 shares issued, 10,000 outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000

Paid-in capital in excess of par, preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000

Total contributed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $230,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000

Total contributed capital plus retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . $330,000

Less treasury stock (1,000 shares of common at cost) . . . . . . . . . . . . . . . . . . . . . . . . (12,000)

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $318,000

During 2012, the following stockholders’ equity transactions occurred (in chronological sequence):

a. Issued 500 shares of common stock at $13 per share.

b. Reissued 500 shares of treasury stock at $13 per share.

c. Issued 1,000 shares of preferred stock at $25 per share.

d. Reissued 500 shares of treasury stock at $10 per share.

e. Declared a dividend large enough to meet the current-dividend preference of the preferred stock and to pay the common stockholders $2 per share. Dividends are recorded directly in the retained earnings account.

f. Closed net income of $65,000 to Retained Earnings. Revenues were $400,000; expenses were $335,000.

Required:

1. Journalize the transactions.

2. Prepare the stockholders’ equity section of the balance sheet at December 31, 2012.

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