ACC/423 Phelps Corporation - 63800

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On January 5, 2012, Phelps Corporation received a charter granting the right to issue 5,200 shares of $101 par value, 6% cumulative and nonparticipating preferred stock, and 51,500 shares of $11 par value common stock. It then completed these transactions.

Jan. 11


Issued 20,820 shares of common stock at $18 per share.

Feb. 1


Issued to Sanchez Corp. 4,800 shares of preferred stock for the following assets: equipment with a fair value of $59,390; a factory building with a fair value of $170,900; and land with an appraised value of $325,600.

July 29


Purchased 1,970 shares of common stock at $19 per share. (Use cost method.)

Aug. 10


Sold the 1,970 treasury shares at $15 per share.

Dec. 31


Declared a $0.35 per share cash dividend on the common stock and declared the preferred dividend.

Dec. 31


Closed the Income Summary account. There was a $185,070 net income.



 (a) Record the journal entries for the transactions listed above. (Round answers to 0 decimal places, e.g. 125. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries in the order displayed in the problem statement.)


(b) Prepare the stockholders’ equity section of Phelps Corporation’s balance sheet as of December 31, 2012. (For preferred stock, common stock and treasury stock enter the account name only and do not provide the descriptive information provided in the question.)

Solution Description



Stockholders’ Equity
December 31, 2012
Capital stock          
   Preferred stock—par value $101 per share,
   6% cumulative and nonparticipating,
   5,200 shares authorized,
   4,800 shares issued and outstanding
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Week 2 Practice...