Question 1 The stockholders equity accounts of Pronghorn Cor

Question 1 The stockholders\' equity accounts of Pronghorn Corp. on January 1, 2017, were as follows Preferred Stock (6%, $100 par noncumulative, 4,250 shares authorized) Common Stock ($3 stated value, 350,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value Common Stock Retained Earnings Treasury Stock (4,250 common shares) $255,000 875,000 12,750 560,000 686,000 34,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders\' equity Feb. 1 Issued 5,440 shares of common stock for $32,640 Mar. 20 Purchased 1,500 additional shares of common treasury stock at $9 per share. Oct. 1 Declared a 6% cash dividend on preferred stock, payable November 1 Nov. 1 Paid the dividend declared on October 1 Dec. 1 Declared a $0.50 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017 Dec. 31 Determined that net income for the year was $275,600. Paid the dividend declared on December 1

Solution

Date Accounts Titles and Explanation Debit Credit (Figure in $) Feb-01 Cash     32,640 Common Stock     16,320 Paid in capital in Excess of stated value- Common stock     16,320 Mar-20 Treasury Stock     13,500 Cash     13,500 Oct-01 Cash Dividends     15,300 Dividends Payable     15,300 Nov-01 Dividends Payable     15,300 Cash     15,300 Dec-01 Cash Dividends 1,45,679 Issued 2,91,667 Dividends Payable 1,45,679 Treasury stock     -4,250 (291,357 x $0.5) Additional Share Issued       5,440 Treasury stock Purchased     -1,500 2,91,357 Dec-31 Income Summary 2,75,600 Retained Earnings 2,75,600 Dec-31 Retained Earnings 1,60,979 Cash Dividends 1,60,979 ($15,300 + $145,679) Dec-31 Dividends Payable 1,45,679 Cash 1,45,679