(SOLVED)- Edgar Corporation was authorized to issue 100 000 shares of 8


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Edgar Corporation was authorized to issue 100,000 shares of $8 par common stock and 50,000 shares of $80 par, 4 percent, cumulative preferred stock. Edgar Corporation completed the following transactions during its first two years of operation:
2016
Jan. 2 .. Issued 25,000 shares of $8 par common stock for $10 per share.
15 .. Issued 2,000 shares of $80 par preferred stock for $90 per share.
Feb. 14 … Issued 20,000 shares of $8 par common stock for $12 per share.
Dec. 31 .. During the year, earned $280,000 of cash revenues and paid $165,000 of cash operating expenses.
31 … Declared the cash dividend on outstanding shares of preferred stock for 2016. The
dividend will be paid on January 31 to stockholders of record on January 15, 2017.
31 … Closed revenue, expense, and dividend accounts to the retained earnings account.
2017
Jan. 31 … Paid the cash dividend declared on December 31, 2016.
Mar. 1 …. Issued 4,000 shares of $80 par preferred stock for $92 per share.
June 1 …. Purchased 1,000 shares of common stock as treasury stock at $14 per share.
Dec. 31 … During the year, earned $185,000 of cash revenues and paid $110,000 of cash operating expenses.
31 .. Declared the dividend on the preferred stock and a $1.00 per share dividend on the common stock.
31 … Closed revenue, expense, and dividend accounts to the retained earnings a c count.
Required
a. Prepare journal entries for these transactions for 2016 and 2017 and post them to T-accounts.
b. Prepare the stockholders’ equity section of the balance sheet at December 31, 2016.
c. Prepare the balance sheet at December 31, 2017.

Answer

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