Problem 15-1

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** Please answer all the problems correctly. I have attached the Excel Spreadsheet for you to fill out the answers in.


** Please see attached copy of the excel spreadsheet. Please fill out the answers on the first TAB of the excel spreadsheet   that says  “P15-1”


Problem 15-1 :

On January 5, 2014, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions.

Jan. 11Issued 20,000 shares of common stock at $16 per share.Feb. 1Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: equipment with a fair value of $50,000; a factory building with a fair value of $160,000; and land with an appraised value of $270,000.July 29Purchased 1,800 shares of common stock at $17 per share. (Use cost method.)Aug. 10Sold the 1,800 treasury shares at $14 per share.Dec. 31Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend.Dec. 31Closed the Income Summary account. There was a $175,700 net income.

Instructions


(a)


Record the journal entries for the transactions listed above.


(b)


Prepare the stockholders’ equity section of Phelps Corporation’s balance sheet as of December 31, 2014.

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