Problem 134A Peck Corporation is authorized to issue 24000 s

Problem 13-4A

Peck Corporation is authorized to issue 24,000 shares of $50 par value, 10% preferred stock and 130,000 shares of $5 par value common stock. On January 1, 2017, the ledger contained the following stockholders’ equity balances.

During 2017, the following transactions occurred.

Net income for the year was $263,000. No dividends were declared.

Journalize the transactions and the closing entry for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J2 for the posting reference.) (Post entries in the order of journal entries presented in the previous part.)

Preferred Stock

Date

Explanation

Ref.

Debit

Credit

Balance

Balance

?

J2

J2

J2

Common Stock

Date

Explanation

Ref.

Debit

Credit

Balance

Balance

?

J2

J2

Paid-in Capital in Excess of Par—Preferred Stock

Date

Explanation

Ref.

Debit

Credit

Balance

Balance

?

J2

J2

J2

Paid-in Capital in Excess of Par—Common Stock

Date

Explanation

Ref.

Debit

Credit

Balance

Balance

?

J2

J2

Retained Earnings

Date

Explanation

Ref.

Debit

Credit

Balance

Balance

?

J2

Prepare a stockholders’ equity section at December 31, 2017. (Enter the account name only and do not provide the descriptive information provided in the question.)

Preferred Stock (11,500 shares)		$575,000
Paid-in Capital in Excess of Par—Preferred Stock		74,500
Common Stock (69,500 shares)		347,500
Paid-in Capital in Excess of Par—Common Stock		670,000
Retained Earnings		350,000

Solution

Date Account tiltes and explanation Ref. Debit Credit Feb 1. Land J1 126000 Preferred stock (1900*50) 95000 Paid-in Capital in Excess of Par—Preferred Stock 31000 (Issued preferred stock for land) Mar 1. Cash (1300*65) J2 84500 Preferred stock (1300*50) 65000 Paid-in Capital in Excess of Par—Preferred Stock 19500 (Issued preferred stock for cash) July 1. Cash (17000*7) J3 119000 Common Stock (17000*5) 85000 Paid-in Capital in Excess of Par—Common Stock 34000 (Issued common stock for cash) Sep 1. Patent (350*72) (Note:1) J4 25200 Preferred stock (350*50) 17500 Paid-in Capital in Excess of Par—Preferred Stock 7700 (Issued preferred stock for patent) Dec 1. Cash (8000*7.50) J5 60000 Common Stock (8000*5) 40000 Paid-in Capital in Excess of Par—Common Stock 20000 (Issued common stock for cash) Dec 31. Income summary J6 263000 Retained earnings 263000 (Closing of income summary) Note:1- Consider market value of preferred stock as the fair value of the patent since the fair value for the patent was indeterminable. Preferred stock Date Explanation Ref. Debit Credit Balance Jan 1. Balance 575000 Feb 1. Land J1 95000 670000 Mar 1. Cash J2 65000 735000 Sept 1. Patent J4 17500 752500 Paid-in Capital in Excess of Par—Preferred Stock Date Explanation Ref. Debit Credit Balance Jan 1. Balance 74500 Feb 1. Land J1 31000 105500 Mar 1. Cash J2 19500 125000 Sept 1. Patent J4 7700 132700 Common stock Date Explanation Ref. Debit Credit Balance Jan 1. Balance 347500 July 1. Cash J3 85000 432500 Dec 1. Cash J5 40000 472500 Paid-in Capital in Excess of Par—Common Stock Date Explanation Ref. Debit Credit Balance Jan 1. Balance 670000 July 1. Cash J3 34000 704000 Dec 1. Cash J5 20000 724000 Retained earnings Date Explanation Ref. Debit Credit Balance Jan 1. Balance 350000 Dec 31. Income summary J6 263000 613000 Shareholder\'s equity section $ Paid in capital: Preferred stock 752500 Common stock 472500 Additional paid-in capital Preferred stock 132700 Common stock 724000 Total Paid in capital 2081700 Retained earnings 613000 Total shareholder\'s equity 2694700