E15-18 Anne Cleves Company
reported the following amounts in the stockholders’ equity section of its
December 31, 2013, balance sheet.
Preferred stock, 10%,
$100 par (10,000 shares authorized, 2,000 shares issued) $200,000
Common stock, $5 par
(100,000 shares authorized, 20,000 shares issued) 100,000
Additional paid-in capital 125,000
Retained earnings 450,000
Total $875,000
During 2014, Cleves took part in
the following transactions concerning stockholders’ equity.
1. Paid the annual 2013
$10 per share dividend on preferred stock and a $2 per share dividend
on common stock. These dividends had been declared on December 31, 2013.
2.
Purchased 1,700 shares of its own outstanding common stock for
$40 per share. Cleves uses the cost method.
3.
Reissued 700 treasury shares for land valued at $30,000.
4. Issued 500 shares of
preferred stock at $105 per share.
5. Declared a 10% stock
dividend on the outstanding common stock when the stock is selling for
$45 per share.
6. Issued the stock dividend.
7. Declared the annual 2014
$10 per share dividend on preferred stock and the $2 per share
dividend on common stock. These dividends are payable in 2015.
(a) Prepare journal entries to
record the transactions described above. (Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter
0 for the amounts.)
No. Account Titles and
Explanation Debit Credit
(b) Prepare the December 31, 2014,
stockholders’ equity section. Assume 2014 net income was $330,000. (Enter
account name only .Do not provide any descriptive information.)
TUTORIAL PREVIEW
(a)
|
1.
|
Dividends Payable—Preferred (2,000 X $10)
|
20,000
| |
Dividends Payable—Common (20,000 X $2)
|
40,000
| |||
Cash
|
60,000
| |||
2.
|
Treasury Stock
|
68,000
|
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