stockholders equity accounts and other related accounts of gonz 245571

Stockholders’ equity accounts and other related accounts of Gonzales Company as of

January 1, 20–, the beginning of its fiscal year, are shown below.

Preferred stock subscriptions receivable………………………………$ 50,000

Preferred stock, $10 par, 9% (200,000 shares authorized;

20,000 shares issued)……………………………………………………200,000

Preferred stock subscribed (10,000 shares)…………………………….100,000

Paid-in capital in excess of par—preferred stock………………………..40,000

Common stock, $10 par (100,000 shares authorized;

60,000 shares issued)……………………………………………………600,000

Paid-in capital in excess of par—common stock……………………….250,000

Retained earnings……………………………………………………….750,000

During 20–, Gonzales Company completed the following transactions affecting stockholders’ equity:

(a) Received $20,000 for the balance due on subscriptions for preferred stock with a par value of $40,000 and issued the stock.

(b) Purchased 10,000 shares of common treasury stock for $18 per share.

(c) Received subscriptions for 10,000 shares of common stock at $19 per share, collecting down payments of $45,000.

(d) Issued 15,000 shares of common stock in exchange for land with a fair market value of $290,000.

(e) Sold 5,000 shares of common treasury stock for $100,000.

(f) Issued 10,000 shares of preferred stock at $11.50 per share, receiving cash.

(g) Sold 3,000 shares of common treasury stock for $17 per share.

REQUIRED

1. Prepare general journal entries for the transactions, identifying each transaction by letter.

2. Post the journal entries to appropriate T accounts. The cash account has a beginning balance of $300,000.

3. Prepare the stockholders’ equity section of the balance sheet as of December 31, 20–. Net income for the year was $825,000 and dividends of $400,000 were paid.

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