Exercise 15-18 Windsor Company reported the following amounts in the stockholders’ equity section of its December 31, 2019, balance sheet. Preferred stock, 9%, $100 par (10,000 shares authorized, 1,800 shares issued)   $180,000 Common stock, $5 par (101,500 shares authorized, 20,300 shares issued)   101,500 Additional paid-in capital   130,000 Retained earnings   486,000    Total   $897,500 During 2020, Windsor took part in the following transactions concerning stockholders’ equity. 1.   Paid the annual 2019 $9 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2019. 2.   Purchased 1,800 shares of its own outstanding common stock for $41 per share. Windsor uses the cost method. 3.   Reissued 700 treasury shares for land valued at $31,400. 4.   Issued 510 shares of preferred stock at $104 per share. 5.   Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share. 6.   Issued the stock dividend. 7.   Declared the annual 2020 $9 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2021.   Prepare journal entries to record the transactions described above. Prepare the December 31, 2020, stockholders’ equity section. Assume 2020 net income was $333,000.

Exercise 15-18

Windsor Company reported the following amounts in the stockholders’ equity section of its December 31, 2019, balance sheet.

Preferred stock, 9%, $100 par (10,000 shares authorized, 1,800 shares issued)

 

$180,000

Common stock, $5 par (101,500 shares authorized, 20,300 shares issued)

 

101,500

Additional paid-in capital

 

130,000

Retained earnings

 

486,000

   Total

 

$897,500

During 2020, Windsor took part in the following transactions concerning stockholders’ equity.

1.

 

Paid the annual 2019 $9 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2019.

2.

 

Purchased 1,800 shares of its own outstanding common stock for $41 per share. Windsor uses the cost method.

3.

 

Reissued 700 treasury shares for land valued at $31,400.

4.

 

Issued 510 shares of preferred stock at $104 per share.

5.

 

Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share.

6.

 

Issued the stock dividend.

7.

 

Declared the annual 2020 $9 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2021.

 

Prepare journal entries to record the transactions described above.

Prepare the December 31, 2020, stockholders’ equity section. Assume 2020 net income was $333,000.

 
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