Problem in accounting
A Company reported the following amounts in the stockholders equity section of its December 31, 2017 balance sheet.
Preferred stocks , Authorized 50,000 shares, Issued shares ?L.E 400 par L.E 400,000
Common stocks, Authorized 120,000 shares, Issued shares70,000 L.E ? par value 7,000,000
Additional paid-in capital –preferred stocks 6,000,000
Additional paid-in capital – common stocks 10,000,000
Retained earnings 4,000,000
During 2018, the company took part in the following transactions concerning stockholders equity.
1/1/2018Issued 60,000 common shares at a price of 500L.E per share.
1/2/2018Issued 30,000 preferred shares at a price of 600 L.E per share.
1/3/2018 Got advertising services in exchange with 10,000 common shares where the market price per share was 550 L.E.
1/4/2018 purchased 6000 shares of its own common stocks as treasury stocks at a price of 550L.E per share.
1/5/2018 Reissued 4000 shares of the treasury stocks at a price of 600L.E per share.
• Prepare journal entries to record the transactions occurred during 2018.(12 marks) • Prepare the December 31, 2018, stockholders equity section. Assume 2018 net income was L.E 900,000.(4 marks)