The balance sheet for Lakeland Corporation as of December 31, 2002, is as follows:
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Assets |
$750,000 |
|
|
Liabilities. |
$410,000 |
|
|
Stockholders equity: |
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|
Preferred stock, convertible (5%, $20 par) . |
$ 50,000 |
|
|
Common stock ($10 par).. |
150,000 |
|
|
Paid in capital in excess of par, common stock. |
30,000 |
|
|
Retained earnings |
116,000 |
|
|
$346,000 |
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|
Less treasury stock, common (500 shares |
(6,000) |
340,000 |
|
Total liabilities and stockholders equity |
$750,000 |
|
During 2003, the following transactions were completed in the order given:
a. The company reacquired 750 shares of outstanding common stock at $7 per share.
b. The company reacquired 150 shares of common stock in settlement of an account receivable of $1,500.
c. Semiannual cash dividends of 75 cents per share on common stock and 50 cents per share on preferred stock were declared and paid.
d. Each share of preferred stock is convertible into three shares of common stock. Five hundred shares of preferred stock were converted into common stock. (HINT: Shares are converted at par values, and any excess reduces Retained Earnings.)
e. The 900 shares of common treasury stock acquired during 2003 were sold at $13. The remaining treasury shares were exchanged for a machine with a fair market value of$6,300.
f. The company issued 3,000 shares of common stock in exchange for land appraised at $39,000.
g. Semiannual cash dividends of 75 cents per share on common stock and 50 cents per share on preferred stock were declared and paid.
h. Closed net income of $35,000 to Retained Earnings, which included $135,000 of revenues and $100,000 of expenses.
i. Closed dividends accounts to Retained Earnings.
Required
1. Give the necessary journal entries to record the transactions listed.
2. Prepare the stockholders equity section of the balance sheet as of December 31, 2003.