B4 Record share activities (12 marks) Quick Fix-It Corporation was organized at the beginning of...
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Accounting
B4 Record share activities (12 marks)
Quick Fix-It Corporation was organized at the beginning of this year to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following stock: Common stock, $10 par value, 98,000 shares authorized Preferred stock, $50 par value, 8 percent, 59,000 shares authorized
During January and February of this year, the following stock transactions were completed: a. Sold 78,000 shares of common stock at $20 cash per share. b. Sold 20,000 shares of preferred stock at $80 cash per share. c. Bought 4,000 shares of common stock from a current stockholder for $20 cash per share. Required:
Net income for the year was $210,000; cash dividends declared and paid at year-end were $100,000.
Record the journal entries of transaction a, b, c, dividends declaration and dividend payment. (10
marks)
Calculate the dividends allocated to the preferred stockholders and common stockholders. (Hint:
Use the par value of the preferred stock to calculate the dividend allocated to the preferred stockholders.) (2 marks)
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