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P13-3A ledger of Clear Skies Environmental Corporation on July 1, 2008

 
Description Debit Credit
a.
b.
c.
d.
e.
f.
g.

The following selected accounts appear in the ledger of Clear Skies Environmental Corporation on July 1, 2008,the beginning of the current fiscal year:

Preferred 2% Stock, $100 par (25,000 shares authorized, 18,000 shares issued…………..$1,800,000
Paid-in Capital in Excess of Par - Preferred Stock………………………………………………$216,000
Common Stock, $40 par (100,000 shares authorized, 70,000 shares issued)……………….$2,8000,000
Paid-in Capital in Excess of Par _ Common Stock……………………………………………..$700,000

Retained Earnings…………………………………………………………………………………..$3,200,000

During the year, the corporation completed a number of transactions affecting the stockholders equity. They are

summarized as follows:
a. Issued 12,000 shares of common stock at $62, receiving cash.
b. Sold 5,000 shares of preferred 2% stock at $124.
c. Purchased 10,000 shares of treasury common for $580,000.
d. Sold 7,500 shares of treasury common for $457,500.
e. Sold 1,500 shares of treasury common for $82,500.
f. Declared cash dividends of $2 per share on preferred stock and $0.50 per share on common stock.
g. Paid the cash dividends.

INSTRUCTIONS
Journalize the entries to record the transactions. Identify each entry by letter.

SOLUTION PREVIEW

Problem 13-3A
Description
Debit
Credit
a.
cash
744,000
 
Common stock
 
480,000
Paid-in capital in excess of par
 
264,000