CHAPTER 13

PROBLEMS: SET C
P13-1C Beran Corporation was organized on January 1, 2017. It is authorized to issue Journalize stock transactions,
20,000 shares of 6%, $50 par value preferred stock, and 500,000 shares of no-par common post, and prepare paid-in
stock with a stated value of $1 per share. The following stock transactions were completed capital section.
during the first year. (LO 2, 4)
Jan. 10 Issued 100,000 shares of common stock for cash at $3 per share.
Mar. 1 Issued 10,000 shares of preferred stock for cash at $55 per share.
Apr. 1 Issued 25,000 shares of common stock for land. The asking price of the land
was $90,000. The company’s estimate of fair value of the land was $75,000.
May 1 Issued 75,000 shares of common stock for cash at $4 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill for
$50,000 for services provided in helping the company organize.
Sept. 1 Issued 5,000 shares of common stock for cash at $6 per share.
Nov. 1 Issued 2,000 shares of preferred stock for cash at $60 per share.

Instructions
(a) Journalize the transactions.
(b) Post to the stockholders’ equity accounts. (Use J1 as the posting reference.) (c) Total paid-in capital
(c) Prepare the paid-in capital section of stockholders’ equity at December 31, 2017. $1,425,000

P13-2C Cheng Corporation had the following stockholders’ equity accounts on January 1, Journalize and post treasury
2017: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par—Common Stock stock transactions, and
$500,000, and Retained Earnings $100,000. In 2017, the company had the following treasury prepare stockholders’ equity
stock transactions. section.

Mar. 1 Purchased 5,000 shares at $6 per share. (LO 3, 4)

Instructions
(a) Journalize the treasury stock transactions, and prepare the closing entry at December
31, 2017, for net income.
(b) Open accounts for (1) Paid-in Capital from Treasury Stock, (2) Treasury Stock, and (b) Treasury Stock $6,000
(3) Retained Earnings. Post to these accounts using J12 as the posting reference. (c) Total stockholders’ equity
(c) Prepare the stockholders’ equity section for Cheng Corporation at December 31, 2017. $1,053,000

P13-3C The stockholders’ equity accounts of Reyes Corporation on January 1, 2017, were Journalize and post
as follows. transactions, prepare
stockholders’ equity section.
Preferred Stock (10%, $100 par, noncumulative, 5,000 shares authorized) $ 300,000
Common Stock ($5 stated value, 300,000 shares authorized) 1,000,000 (LO 1, 2, 3, 4)
Paid-in Capital in Excess of Par—Preferred Stock 20,000
Paid-in Capital in Excess of Stated Value—Common Stock 425,000
Retained Earnings 488,000
Treasury Stock (5,000 shares) 35,000
During 2017, the corporation had the following transactions and events pertaining to its
stockholders’ equity.
Feb. 1 Issued 3,000 shares of common stock for $24,000.
Mar. 20 Purchased 1,500 additional shares of common treasury stock at $7 per share.
June 14 Sold 4,000 shares of common treasury stock for $36,000.
Sept. 3 Issued 2,000 shares of common stock for a patent valued at $17,000.
Dec. 31 Determined that net income for the year was $320,000.

Instructions
(a) Journalize the transactions and the closing entry for net income.
(b) Enter the beginning balances in the accounts and post the journal entries to the stock-
holders’ equity accounts. (Use J1 as the posting reference.) (c) Total stockholders’ equity
(c) Prepare a stockholders’ equity section at December 31, 2017. $2,584,500
2 13 Corporations: Organization and Capital Stock Transactions

Journalize and post stock P13-4C Kwun Corporation is authorized to issue 10,000 shares of $30 par value, 10%
transactions, and prepare preferred stock and 200,000 shares of $2 par value common stock. On January 1, 2017, the
stockholders’ equity section. ledger contained the following stockholders’ equity balances.
(LO 1, 2, 3, 4) Preferred Stock (4,000 shares) $120,000
Paid-in Capital in Excess of Par—Preferred 60,000
Common Stock (70,000 shares) 140,000
Paid-in Capital in Excess of Par—Common 700,000
Retained Earnings 300,000
During 2017, the following transactions occurred.
Feb. 1 Issued 1,000 shares of preferred stock for land having a fair value of $65,000.
Mar. 1 Issued 2,000 shares of preferred stock for cash at $60 per share.
July 1 Issued 20,000 shares of common stock for cash at $5.80 per share.
Sept. 1 Issued 800 shares of preferred stock for a patent. The asking price of the
patent was $60,000. Market values were preferred stock $65 and patent,
indeterminable.
Dec. 1 Issued 10,000 shares of common stock for cash at $6 per share.
Dec. 31 Net income for the year was $210,000. No dividends were declared.

Instructions
(a) Journalize the transactions and the closing entry for net income.
(b) Enter the beginning balances in the accounts, and post the journal entries to the stock-
(c) Total stockholders’ equity holders’ equity accounts. (Use J2 as the posting reference.)
$1,943,000 (c) Prepare a stockholders’ equity section at December 31, 2017.

Prepare stockholders’ equity P13-5C The following stockholders’ equity accounts arranged alphabetically are in the
section. ledger of Hite Corporation at December 31, 2017.
(LO 4) Common Stock ($10 stated value) $1,200,000
Paid-in Capital from Treasury Stock 6,000
Paid-in Capital in Excess of Stated Value—Common Stock 690,000
Paid-in Capital in Excess of Par—Preferred Stock 288,400
Preferred Stock (8%, $100 par, noncumulative) 400,000
Retained Earnings 876,000
Treasury Stock (8,000 shares) 88,000

Total stockholders’ equity Instructions

Prepare entries for stock P13-6C Moritz Corporation has been authorized to issue 40,000 shares of $100 par value,
transactions and prepare 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The
stockholders’ equity section. corporation assigned a $5 stated value to the common stock. At December 31, 2017, the
(LO 2, 3, 4) ledger contained the following balances pertaining to stockholders’ equity.
Preferred Stock $ 240,000
Paid-in Capital in Excess of Par—Preferred 56,000
Common Stock 2,000,000
Paid-in Capital in Excess of Stated Value—Common 5,200,000
Treasury Stock (1,000 shares) 24,000
Paid-in Capital from Treasury Stock 2,000
Retained Earnings 560,000
The preferred stock was issued for land having a fair value of $296,000. All common stock
issued was for cash. In November, 1,500 shares of common stock were purchased for the
treasury at a per share cost of $24. In December, 500 shares of treasury stock were sold for
$28 per share. No dividends were declared in 2017.

Instructions
(a) Prepare the journal entries for the:
(1) Issuance of preferred stock for land.
(2) Issuance of common stock for cash.
(3) Purchase of common treasury stock for cash.
(b) Total stockholders’ equity (4) Sale of treasury stock for cash.
$8,034,000 (b) Prepare the stockholders’ equity section at December 31, 2017.