Choctaw Co completed the following transactions in 2018 the

Choctaw Co. completed the following transactions in 2018, the first year of operation: 1. Issued 26,000 shares of $15 par common stock for $15 per share. 2. Issued 3,600 shares of $25 stated value preferred stock for $25 per share. 3. Purchased 1,600 shares of common stock as treasury stock for $17 per share. 4. Declared a $2,600 cash dividend on preferred stock. 5. Sold 1,000 shares of treasury stock for $19 per share. 6. Paid $2,600 cash for the preferred dividend declared in Event 4. 7. Earned cash revenues of $90,000 and incurred cash expenses of $47,000. 8. Appropriated $8,600 of retained earnings. Required a. Organize the transaction in accounts under an accounting equation b. Prepare the stockholders\' equity section of the balance sheet as of December 31, 2018.

Solution

Solution a:

Solution b:

Choctaw Co
Accounting Equation for the year 2018
Event	Assets	=	Liabilities	Stockholder\'s Equity
Cash	=	Dividends Payable	+	Preferred Stock		Common Stock	+	Paid in capital in excess treasury stock	-	Treasury Stock	+	Retained Earnings	+	Appropriated Retained Earnings	Accounting Title retained Earnings
1	$390,000.00						$390,000.00
2	$90,000.00				$90,000.00
3	-$27,200.00										$27,200.00
4			$2,600.00										-$2,600.00			Dividends
5	$19,000.00								$2,000.00		-$17,000.00
6	-$2,600.00		-$2,600.00
7a	$90,000.00												$90,000.00			Revenue
7b	-$47,000.00												-$47,000.00			Expenses
8													-$8,600.00		$8,600.00
Totals	$512,200.00		$0.00		$90,000.00		$390,000.00		$2,000.00		$10,200.00		$31,800.00		$8,600.00