ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:
ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:
Preferred Stock: 7%, par value $100 per share, 100,000 shares.
Common Stock: $1 par value, 500,000 shares.
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The following transactions occurred during the year:
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1/19/12 %u2013 Issued 100,000 shares of common stock for $17 cash per share.
1/31/12 %u2013 Issued 3,000 shares of preferred stock for $115 cash per share.
11/1/12 %u2013 Repurchased 30,000 shares of common stock for $22 cash per share.
12/1/12 %u2013 Declared and paid a total dividend of $95,000.
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Required:
1. Prepare the journal entry for each transaction listed above.
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2. In your own words, explain the main differences between common and preferred stock.Â
Answers
Status NEW
Posted 08 Oct 2017 08:10 PM
My Price 4.00
ABC----------- In-----------c-----------
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file 1507494620-ABC Inc.docx preview (527 words )
A-----------BC -----------Inc-----------. w-----------as -----------inc-----------orp-----------ora-----------ted----------- on----------- 1/-----------15/-----------12.----------- Th-----------eir----------- co-----------rpo-----------rat-----------e c-----------har-----------ter----------- au-----------tho-----------riz-----------ed -----------the----------- fo-----------llo-----------win-----------g c-----------api-----------tal----------- st-----------ock-----------: ----------- Pr-----------efe-----------rre-----------d S-----------toc-----------k: -----------7%,----------- pa-----------r v-----------alu-----------e $-----------100----------- pe-----------r s-----------har-----------e, -----------100-----------,00-----------0 s-----------har-----------es.----------- -----------Com-----------mon----------- St-----------ock-----------: $-----------1 p-----------ar -----------val-----------ue,----------- 50-----------0,0-----------00 -----------sha-----------res-----------. ----------- Th-----------e f-----------oll-----------owi-----------ng -----------tra-----------nsa-----------cti-----------ons----------- oc-----------cur-----------red----------- du-----------rin-----------g t-----------he -----------yea-----------r: ----------- 1-----------/19-----------/12----------- %u-----------201-----------3 I-----------ssu-----------ed -----------100-----------,00-----------0 s-----------har-----------es -----------of -----------com-----------mon----------- st-----------ock----------- fo-----------r $-----------17 -----------cas-----------h p-----------er -----------sha-----------re.----------- -----------1/3-----------1/1-----------2 %-----------u20-----------13 -----------Iss-----------ued----------- 3,-----------000----------- sh-----------are-----------s o-----------f p-----------ref-----------err-----------ed -----------sto-----------ck -----------for----------- $1-----------15 -----------cas-----------h p-----------er -----------sha-----------re.----------- -----------11/-----------1/1-----------2
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