70.2K

Verified Solution

Link Copied!

Looking for help on this current question, I understand the concept but not the steps in which I need to take to answer. Seem to be confused.

Date Account Title and Explanation Debit Credit 1/1/18 1/3/18 1/4/18 2/20/18 3/31/18 5/30/18 6/20/18 8/20/18 9/9/18 3/20/18 2/9/18 10/25/18 12/31/18 Part b - Fill in the missing numbers (darker gray shaded areas) for the account balances in the stockholder's equity section of the balance sheet as at December 31, 2018 Prakum Corporation Balance Sheet (partial) As at December 31, 2018 Stockholder's Equity Paid-in Capital Preferred Stock, 10% cumulative, $80 par value, 200000 shares authorized, 4000 shares issued and outstanding Common Stock, $5 par value, unlimited shares authorized, 106040 shares issued, 111040 outstanding $ $ Additional Paid-In Capital Total Paid-In Capital Retained Earnings, $50000 restricted by purchase of treasury stock Total Paid-In Capital and Retained Earnings Less: Treasury Stock (5000 shares at cost) Total Stockholder's Equity 163,320.00 163,320.00 $ $ 163,320.00 Prakun Corporation was formed on January 1, 2018. The corporate charter authorized the issuance of 10%, $80 par value, 200,000 cumulative preferred shares and unlimited $5 par value common shares. The following transactions occurred between January 1, 2018 and December 31, 2018. Jan 1 Issued 6,400 shares of common stock in exchange for organizational expenses of $2,000 and $30,000 cash Jan 3 Issued 100,000 shares of common stock in return for $800,000 cash Jan 4 Issued 4,000 shares of preferred stock in return for $400,000 cash Feb 20 Purchased 10,000 shares of its own common stock for $10 per share Mar 31 Declared cash dividends of $50,000 to the owners of preferred and common stock as of April 30. The company uses the cash dividends account to record cash dividends. May 30 Paid the cash dividends declared on March 31 Jun 20 Declared 10% common stock dividends to the owners of common stock as of July 20. The market price of common stock on this date is $12 per share. The company uses the retained earnings account to record stock dividends. Aug 20 Distributed the stock dividends declared on June 20 Sep 9 Sold 2,000 shares of treasury stock for $11 per share Oct 25 Sold 3,000 shares of treasury stock for $9 per share Dec 31 Estimated income tax expense of $120,000. However, the actual amount of income tax due for this period based on tax laws is determined to be $100,000. Required a) Journalize the entries to record all the transactions. Date Account Title and Explanation Debit Credit 618 b) Fill in the missing numbers (gray shaded areas) of shares and account balances in the stockholders' equity section of the balance sheet as at December 31, 2018. Prakun Corporation Balance Sheet (partial) As at December 31, 2018 Stockholders' Equity Paid-In Capital Preferred stock, 10% cumulative, $80 par value, 200,000 shares authorized, shares issued and outstanding Common stock, $5 par value, unlimited shares authorized, shares issued, 111,040 outstanding Additional Paid-In Capital Total Paid-In Capital Retained Earnings, $50,000 restricted by purchase of treasury stock Total Paid-In Capital and Retained Earnings Less: Treasury Stock (5,000 shares at cost) Total Stockholders' Equity 163,320 619

Answer & Explanation Solved by verified expert

See Answer