70.2K

Verified Solution

Link Copied!

Spangler Corporation entered into the following stock transaction during the past year.

(1) Received a charter allowing it to issue 15,000 chares of $100 par vale preferred stock and 18,000 shares of $20 par value common stock.

(2) Issued 11,000 shares of common stock to the corporate founders in exchange for land and a building valued by the board of directors at $70,000 and $215,000 respectively.

(3) Sold 9,000 chares of preferred stock for $115 per share.

(4) sold 1,000 shares of preferred stock at par value and 800 shares of common stock at $50 per chare to an investor.

(5) Purchased 500 shares of preferred stock for $108 oer share.

(6) Purchased 700 shares of comon stock for $72 per share.

(7) Sold 300 shares of the preferred stock held as treasury stock for $110 per share.

(8) Resold 400 shares of common stock held as treasury stock for $65 per share.

Instructions:

a. prepare journal entries for the transactions noted above. No other transactions have affected the stock accoutns. Record all treasury stocks transactions using the cost method.

b. Assumming that Spangler Corporation had retained earnings od $187,000 (not including the above transactions), prepare the stockholders equity section of its balance sheet based on the above transactions.

Answer & Explanation Solved by verified expert

See Answer