ACC307 – FAIS III
This assignment is due on Monday, September 11th.
Hatch Company has two classes of capital stock: 8%, $20 par
preferred and $5 par common. At December 31, 2017, the following
accounts were included in stockholders’ equity.
Preferred Stock, 1,000,000 shares authorized, 150,000 shares issued
and outstanding $3,000,000 Common Stock, 5,000,000 shares authorized, 2,000,000 shares
issued and outstanding
Paid-in Capital in Excess of Par – Preferred Stock
Paid-in Capital in Excess of Par – Common Stock
Retained Earnings 10,000,000
200,000
27,000,000
4,500,000 The following transactions affected stockholders’ equity during 2018.
Jan. 1 – 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 – 100,000 shares of common stock issued at $20 per share.
June 1 – Declared a 5% stock dividend on the outstanding common stock when the stock is selling for $25 per share.
June 20 – Issued the stock dividend declared on June 1.
July 1 – 30,000 shares of common treasury stock purchased at $10 per share.
Sept. 15 – 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 – The preferred dividend is declared, and a common dividend at $0.50 per share is declared.
Dec. 31 – Net income is $2,100,000.
Required:
1. Prepare Journal Entries to Record the Transactions.
2. Post all information into T-accounts.
3. Prepare the stockholders’ equity section for Hatch Company at December 31, 2018. Show all supporting computations.