eBook Show Me How Calculator Selected Chart of Accounts The

eBook Show Me How Calculator Selected Chart of Accounts The tollowing selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal ye Paid-In Capital in Excess of Par- Preferred Stock Common Stock, $3 par (5,000,000 shares authorized, 2,020,000 shares issued) Paid-In Capital in Excess of Par-Common Stock 165,220 6,060,000 1,212,000 35,446,000 Jan. 5 Issued 519,600 shares of common stock at $8, receiving cash Feb. 10 issued 10,000 shares of preferred 1% stock at S61 Mar 19 Purchased 46,400 shares of treasury common for $8 per share May 16 Sold 20,800 shares of treasury common for $10 per share. Aug 25 Sold 5,600 shares of treasury common for $7 per share. Dec 6 Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock 31 Paid the cash dividends 5 more Check My Work uses remaining.

Solution

Solution - Journal entry worksheet of EJ Construction Inc.

(Issue of shares for more than face value of $3. Excess Value is = (Issued price - Face value)

($8 - $3) = $5

(Issue of preferred stock at Price more than par value. Excess Value =

($61 - $50) = $11

(Stock bought back at value more than par value.

Excess Value = ($10 - $8) = $2 will be transfeered to Paid in treasury stock

(Stock Bought back at value less than par value)

Debit amount paid in treasury stock = ($8 -$7) = $1

Note 1 - Calculation of dividend

Serial Number	Date	Description	Post ref.	Debit	Credit
1	January 5	110 Cash (519600 shares * $8)		$4156800
		311 Common stock (519600 shares * $3)			$1558800
		312 Paid in capital in excess of Par common stock (519600 shares * $5)			$2598000
		(Issue of shares for more than face value of $3. Excess Value is = (Issued price - Face value) ($8 - $3) = $5
2	February 10	110 Cash (10800 shares * $61)		$658800
		321 Preferred stock (10800 shares * $50)			$540000
		322 Paid in capital in excess of preferred stock (10800 shares * $11)			$118800
		(Issue of preferred stock at Price more than par value. Excess Value = ($61 - $50) = $11
3	March 19	315 Treasury stock ($46400 * $8)		$371200
		110 cash			$371200
		(Stock bought back at par value and cash paid)
4	May 16	110 Cash (20800 shares * $10)		$208000
		315 Treasury stock (20800 shares * $8)			$166400
		331 Paid in capital from sale of treasury stock (20800 shares * $2)			$41600
		(Stock bought back at value more than par value. Excess Value = ($10 - $8) = $2 will be transfeered to Paid in treasury stock
5	August 25	110 Cash (5600 shares * $7)		$39200
		331 Paid in capital from sale of treasury stock (5600 shares * $1)		$5600
		315 Treasury stock (5600 shares * $8)			$44800
		(Stock Bought back at value less than par value) Debit amount paid in treasury stock = ($8 -$7) = $1
6	December 6	351 Cash dividend (Note 1)		$294910
		231 Cash Dividend payable			$294910
		(Cash Dividend issued and liability created)
7	December 31	231 Cash dividend payable		$294910
		110 Cash			$294910
		(Cash dividend paid from cash)