Question

The stockholders’ equity accounts of Martinez Corporation on January 1, 2020, were as follows:

Answer 1

Answer:

A)

Feb. 1 Issued 26,000 shares of common stock for $116,000.

Dr Cash 116,000

    Cr Common stocks 26,000

    Cr Paid-in capital in excess of stated value - common stock 90,000

Apr. 14 Sold 5,500 shares of treasury stock—common for $33,900.

Dr Cash 33,900

    Cr Treasury stocks 27,500

    Cr Paid-in capital in excess of stated value - common stock 6,400

Sept. 3 Issued 4,800 shares of common stock for a patent valued at $34,100.

Dr Patent 34,100

    Cr Common stocks 4,800

    Cr Paid-in capital in excess of stated value - common stock 29,300

Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $5,700.

Dr Treasury stock 5,700

    Cr Cash 5,700

Dec. 31 Determined that net income for the year was $465,000.

Dr Income summary 465,000

    Cr Retained earnings 465,000

B)

Preferred Stock $416,000

Common Stock $1,480,800

Paid-in Capital in Excess of Par - Preferred Stock $110,000

Paid-in Capital in Excess of Stated Value - Common Stock $1,525,700

Retained Earnings $2,315,000

Treasury Stock $33,200

C)

Stockholders' Equity

Preferred 8% Stock, $52 par value        

(10,000 stocks authorized)                     $416,000

Paid-in Capital in Excess of Par              $110,000                     $526,000

Common Stock                                    

(2,100,000 stocks authorized)              $1,480,800

Paid-in Capital in Excess of Par            $1,525,700                 $3,006,500

Total paid in capital                                                                  $3,532,500

Retained Earnings                                                                     $2,315,000

Treasury Stock (6,500 stocks at cost)                                       ($33,200)

Total Stockholders' Equity                                                        $5,814,300