REVIEW PROBLEM
The following data pertain to the shareholders' equity transactions of Pike Place Corporation over its first three years of operations: 2010, 2011, and 2012. Transactions are described and followed by the appropriate journal entries. The shareholders' equity section of the balance sheet is shown for each of the three years.
2010
(1) The company issued 1,000 shares of $1 par value stock for $70 per share.
(2) The company issued 500 shares of no par value, cumulative preferred stock for $50 per share.
(3) Net income during the year = $2,000 Dividends = $0
2011
(1) The company purchased 200 treasury (common) shares for $60 per share.
(2) Net income for the year = $20,000
Dividends = $6,600: $5,000 for preferred shareholders [$2,500 dividends in arrears and $2,500 (500 sh. X $5/sh.)] for 2011, and $1,600 for the common shareholders (800 outstanding sh. X $2/sh.). The dividends were declared and paid.
2012
(1) The company reissued 100 treasury shares for $65 each.
(2) The ...
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