Problem 133A The stockholders equity accounts of Castle Corp

Problem 13-3A The stockholders\' equity accounts of Castle Corporation on January 1, 2017, were as follows. Preferred Stock (896, $50 par, 10,500 shares authorized) Common Stock ($1 stated value, 1,900,000 shares authorized) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess o Stated Value-Common Stock Retained Earnings Treasury Stock (11,000 common shares) 375,000 1,250,000 140,000 1,450,000 1,850,000 55,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders\' equity Feb. 1 Issued 24,500 shares of common stock for $125,000 Apr. 14 Sold 5,600 shares of treasury stock-common for $32,200 Sept. 3 Issued 4,700 shares of common stock for a patent valued at $35,000 Nov. 10 Purchased 1,100 shares of common stock for the treasury at a cost of $6,100 Dec. 31 Determined that net income for the year was $420,000 No dividends were declared during the year

Solution

JOURNAL ENTRIES: 1-Feb-17 Cash 125000 Common stock ($1 stated value) 24500 Paid in capital in excess of stated value-Common stock 100500 14-Apr-17 Cash 32200 Treasury stock =55000*5600/11000 = 28000 Paid in capital - Treasury stock 4200 3-Sep-17 Patent 35000 Common stock ($1 stated value) 4700 Paid in capital in excess of stated value-Common stock 30300 10-Nov-17 Treasury stock 6100 Cash 6100 31-Dec-17 Income summary 420000 Retained earnings 420000 PREFERRED STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 375000 COMMON STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 1250000 1-Feb-17 24500 1274500 3-Sep-17 4700 1279200 PAID IN CAPITAL IN EXCESS OF PAR-PREFERRED STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 140000 PAID IN CAPITAL IN EXCESS OF STATED VALUE-COMMON STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 1450000 1-Feb-17 100500 1550500 3-Sep-17 30300 1580800 PAID IN CAPITAL FROM TREASURY STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 0 14-Apr-17 4200 4200 RETAINED EARNINGS Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 1850000 31-Dec-17 420000 2270000 TREASURY STOCK Date Explanation reference Debit Credit Balance 1-Jan-17 Balance 55000 14-Apr-17 28000 27000 10-Nov-17 6100 33100 BALANCE SHEET - PARTIAL TOTAL LIABILITIES & STOCKHOLDERS\' EQUITY: STOCKHODERS\' EQUITY: Paid in capital Preferred stock (8%, $50 par, 10500 shares authorized, 7500 shares issued). 375000 Common stock ($1 stated value, 1900000 shares authorized, 1279200 shares issued) 1279200 Total paid in capital at par and stated value 1654200 Paid in capital in excess of par: Paid in capital in excess of par - Preferred stock 140000 Paid in capital in excess of stated value - Common stock 1580800 Paid in capital from treasury stock 4200 Total paid in capital in excess of par 1725000 Total contributed capital 3379200 Retained earnings 2270000 Total contributed capital and retained earnings 5649200 Less: Treasury stock (6500 shares of common stock) 33100 Total Stockholders\' Equity 5616100