Sources of equity, stock issuance, and dividends Tree Comfort Specialists, Inc., reported the following stockholders’ equity on its balance sheet at April 30, 2012.
TREE COMFORT SPECIALISTS, INC.
Stockholders’ Equity
April 30, 2012
Paid-in Capital:
Â
Preferred stock, 6%, ? par, 675,000 shares authorized, 240,000 shares issued
$ 1,200,000
Common stock, par value $1 per share, 9,000,000 shares authorized,
1,330,000 shares issued and outstanding
1,330,000
Paid-in capital in excess of par—common
2,600,000
Total paid-in capital
5,130,000
Retained earnings
11,900,000
Total stockholders’ equity
$ 17,030,000
Requirements
1. Identify the different issues of stock that Tree has outstanding.
2. What is the par value per share of Tree’s preferred stock?
3. Make two summary journal entries to record issuance of all the Tree stock for cash. Explanations are not required.
4. No preferred dividends are in arrears. Journalize the declaration of a $300,000 dividend at April 30, 2012. Use separate Dividends payable accounts for preferred and common. An explanation is not required.