Accounting: The December 31, 2016, the equity section

Accounting: The December 31, 2016, the equity section

Subject: Business / Accounting
I. The December 31, 2016, the equity section of the balance sheet of Springer Company included the following:
Common Stock $1 Par 20 million shares outstanding $ 20,000,000

Paid in Capital in Excess of Par 100,000,000

Retained Earnings 115,000,000

Springer completed the following transactions in 2016 relating to treasury stock:

March 17: Reacquired 5 million shares at $10.

May 17: Reacquired 3 million shares at $9.

August 10: Sold 6 million shares at $12.

Required: a. Assuming Springer uses the cost method, prepare journal entries to record the foregoing transactions on a FIFO basis.

b. Prepare the stockholders’ equity section at August 31.


II. The shareholders’ equity section of Crystal Company’s balance sheet includes the items shown below.

Preferred stock, 6%, $100 par, 1,000,000 shares outstanding

Common stock, $1 par, 50,000,000 shares outstanding

The board of directors of Crystal declared cash dividends of $3 million, $6 million, and $50 million in each of its first 3 years of operation: 2013, 2014, 2015, respectively.

Required: Prepare a schedule showing the distribution of dividendsby amount and per share of preferred and common stock for each of the three years. The preferred stock is cumulative and nonparticipating.

We can do it for you