Preferred Stock Issuance, Dividends,
Disclosure. Rory Storm Roofing and Siding, Inc. reported the...

Question

Preferred Stock Issuance, Dividends,
Disclosure. Rory Storm Roofing and Siding, Inc. reported the following
shareholders’ equity section as of the beginning of the current year:



Rory Storm also issued 823,000 shares of
its $5 par value preferred stock. There is a 6% dividend rate on the preferred
shares that Rory Storm issued at $11 per share. The company paid $180,000 in
underwriting fees to issue the shares. It reported $2,633,000 in net income for
the year and declared and paid dividends of $1 per share on its common
shares and 6% of par for the preferred shares. The company has 1,000,000 shares
authorized for preferred stock.

Required »

a. Prepare the journal entry required to
record the preferred stock issue.

b. Prepare the journal entries required to
record the declaration and payment of the cash dividends.

c. Prepare the stockholders’ equity section
of the balance sheet at the end of the year.

Khushboo · Accepted Answer

Sheet1
	Sr No	Particulars	Debit	Credit
	a.	Cash	9,053,000
		Preferred stock a/c		4,115,000
		Additional paid in capital- preferred stock		4,938,000
		(To record issuance of preferred stock)
		Share issuance expenses	180,000
		Cash		180,000
		(To record share issuance expenses)
	b.	Retained earnings	938,400
		Preferred stock dividend payable		246,900
		Common stock dividend payable		691,

Preferred Stock Issuance, Dividends, Disclosure. Rory Storm Roofing and Siding, Inc. reported the following shareholders’ equity section as of the beginning of the current year: Rory Storm also issued...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment