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On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,000...

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Accounting

On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,000 shares of $50 par value, 14% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions:

Jan. 11 Issued 20,000 shares of common stock at $20 per share.

Feb. 1 Issued to Sanchez Corp. 5,000 shares of preferred stock for the following assets: equipment with a fair value of $60,000; a factory building with a fair market value of $180,000; and land with an appraised value of $250,000.

July 29 Purchased 1,600 shares of common stock at $19 per share. (Use cost method.) Aug. 10 Sold the 1,500 treasury shares at $14 per share.

Dec. 15 Declared 10% stock dividend for common stockholders. Stock price is $58 per share. Shares are issed. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31 Closed the Income Summary account. There was a $186,700 net income.

Instructions (a) Record the journal entries for the transactions listed above. (b) Prepare the stockholders' equity section of Phelps Corporation's balance sheet as of December 31, 2017.

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