Question 1 Cullumber Company reported the following amounts

Question 1 Cullumber Company reported the following amounts in the stockholders\' equity section of its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 1,900 shares issued) $190,000 Common stock, $5 par (101,000 shares authorized, 20,200 shares issued) Additional paid-in capital Retained earnings 101,000 125,000 431,000 $847,000 Total During 2017, Cullumber took part in the following transactions concerning stockholders\' equity. 1. Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,800 shares of its own outstanding common stock for $43 per share. Cullumber uses the cost method. 3. Reissued 700 treasury shares for land valued at $31,600 4. Issued 530 shares of preferred stock at $104 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for S 47 per share. 6. Issued the stock dividend. 7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.

Solution

Journal entry :

No.	Accounts & explanation	debit	credit
5	Retained earnings (20200-1800+700)*10%*47	89770
	Common stock dividend distributable a/c		9550
	Paid in capital in excess of par value		80220
6.	Common stock dividend distributable a/c	9550
	Common stock a/c		9550
7.	Dividend a/c	66320
	Dividend payable-Preferred stock (1900+530*10)		24300
	Dividend payable-common stock (20200-1800+700+1910)*2		42020