Equity transactions and statement preparation
On jan 5, '03 Drabek Corp received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock and 50,000 shares of $5 par value common stock. It then completed these transactions.
Jan 11
Issued 20,000 shares of common stock at $16 per share.
Feb 1
Issued to Robb Nen corp 4,000 shares of preferred stock for the following assests: machinery w/ fair market value of $50,000; a factory building w/ fair market value of $110,000 and land w/ an appraised value of $270,000.
July 29
Purchased 1,800 shares of common stock at $19 per share. (use cost method)
Aug 10
Sold the 1,800 treasury shares at $14 per share
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 $175,700 net income.
INSTRUCTIONS:
a) Record the journal entries for the transactions listed above.
b) Prepare the stockholders equity section of Drabek Corp. balance sheet as of dec 31, 2003
