Reconstruction of Equity Transactions
Manti Company had the following account balances on its balance sheet at December 31, 2008, the end of its first year of operations. All stock was issued on a subscription basis.
|
Common stock subscriptions receivable |
$150,000 |
|
Common stock, $1 par |
3,000 |
|
Common stock subscribed |
9,000 |
|
Paid in capital in excess of par—common |
348,000 |
|
8% preferred stock, $100 par |
120,000 |
|
Paid in capital in excess of par—8% preferred |
60,000 |
|
10% preferred stock, $50 par |
25,000 |
|
Retained earnings |
10,000 |
The reported net income for 2008 was $55,000. Assume that revenues and expenses were closed to a temporary account, Income Summary. Use this account to complete the closing process.
Instructions: From the data given, reconstruct in summary form the journal entries to record all transactions involving the company’s stockholders. Indicate the amount of dividends distributed on each class of stock.