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On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,400 shares of $103 par value, 6% cumulative and nonparticipating preferred stock, and 52,700 shares of $10 par value common stock. It then completed these transactions.
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Jan. 11 |
Issued 21,720 shares of common stock at $18 per share. |
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Feb. 1 |
Issued to Sanchez Corp. 4,500 shares of preferred stock for the following assets: equipment with a fair value of $59,390; a factory building with a fair value of $172,900; and land with an appraised value of $326,300. |
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July 29 |
Purchased 1,850 shares of common stock at $19 per share. (Use cost method.) |
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Aug. 10 |
Sold the 1,850 treasury shares at $14 per share. |
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Dec. 31 |
Declared a $0.30 per share cash dividend on the common stock and declared the preferred dividend. |
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Closed the Income Summary account. There was a $183,440 net income. |
(a) Record the journal entries for the transactions listed above.
(b) Prepare the stockholders’ equity section of Phelps Corporation’s balance sheet as of December 31, 2012.
