The following selected accounts appear in the ledger of Orion Inc. on February 1, 2014, the beginning of the current fiscal year

The following selected accounts appear in the ledger of Orion Inc. on February 1, 2014, the beginning of the current fiscal year:



Preferred 1% Stock, $40 par (75,000 shares authorized,
45,000 shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,800,000
Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000
Common Stock, $12 par (2,000,000 shares authorized,
1,250,000 shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000
Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,750,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,450,000


During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:

a. Issued 360,000 shares of common stock at $22, receiving cash.

b. Issued 14,000 shares of preferred 1% stock at $43.

c. Purchased 66,000 shares of treasury common for $18 per share.

d. Sold 51,000 shares of treasury common for $21 per share.

e. Sold 10,000 shares of treasury common for $16 per share.

f. Declared cash dividends of $0.40 per share on preferred stock and $0.03 per share on common stock.

g. Paid the cash dividends.


Instructions

Journalize the entries to record the transactions. Identify each entry by letter.


Answers:

a. Cash (360,000 shares × $22) 7,920,000
Common Stock (360,000 shares × $12) 4,320,000
Paid-In Capital in Excess of Par—Common
Stock [360,000 shares × ($22 – $12)] 3,600,000
b. Cash (14,000 shares × $43) 602,000
Preferred Stock (14,000 shares × $40) 560,000
Paid-In Capital in Excess of Par—Preferred
Stock [14,000 shares × ($43 – $40)] 42,000
c. Treasury Stock (66,000 shares × $18) 1,188,000
Cash 1,188,000
d. Cash (51,000 shares × $21) 1,071,000
Treasury Stock (51,000 shares × $18) 918,000
Paid-In Capital from Sale of Treasury Stock 153,000
[51,000 shares × ($21 – $18)]
e. Cash (10,000 shares × $16) 160,000
Paid-In Capital from Sale of Treasury Stock 20,000
[10,000 shares × ($18 – $16)]
Treasury Stock (10,000 shares × $18) 180,000
f. Cash Dividends {(59,000 shares × $0.40) + [(1,250,000 shares + 71,750
360,000 shares – 66,000 shares + 51,000 shares +
10,000 shares) × 0.03]}
Cash Dividends Payable 71,750
g. Cash Dividends Payable 71,750
Cash 71,750