(A) GENERAL JOURNAL Date Accounts Debit Credit Cash

I-14.04 Journal entries and statement of stockholders' equity

(a) GENERAL JOURNAL Date Accounts Debit Credit Cash 2,000,000 Common Stock 600,000 Pd-in Cap in Excess of Par - CS 1,400,000 To record issuance of 200,000 shares of $3 par value common stock at $10 per share

A Cash 5,100,000 Preferred Stock 5,000,000 Pd-in Cap in Excess of Par - PS 100,000 To record issuance of 50,000 shares of $100 par value preferred stock at $102 per share

B Treasury Stock 120,000 Cash 120,000 To record acquisition of 10,000 treasury shares at $12 per share

C Dividends 319,000 Dividends Payable 319,000 To record dividend declaration (($5,000,000 X 6%) + ((200,000 - 10,000) X $0.10))

D Dividends Payable 319,000 Cash 319,000 To record payment of previously declared dividends GENERAL JOURNAL Date Accounts Debit Credit E Cash 150,000 Treasury Stock 120,000 Pd-in Cap in Excess of Par - CS 30,000 To record reissue of 10,000 treasury shares at $15 per share

F Retained Earnings 52,000 Common Stock 12,000 Pd-in Cap in Excess of Par - CS 40,000 To record issuance of a 2% stock dividend (200,000 shares X 2% X $13 per share market price)

G Treasury Stock 220,000 Cash 220,000 To record acquisition of 20,000 treasury shares at $11 per share

H Income Summary 800,000 Retained Earnings 800,000 To close net income to retained earnings

(b) Dry Dock Container Corporation Statement of Stockholders’ Equity For the Year Ending December 31, 20X5

Paid-in Paid-in Total Preferred Common Capital Capital Stock- Stock, Stock, $3 in Excess of in Excess of Retained Treasury holders’ $100 Par Par Par - PS Par - CS Earnings Stock Equity Balance - January 1 $ - $ - $ - $ - $ - $ - $ - Issue common shares - 600,000 - 1,400,000 - - 2,000,000 Issue preferred shares 5,000,000 - 100,000 - - - 5,100,000 Purchase treasury stock - - - - - (340,000) (340,000) Cash dividends - - - - (319,000) - (319,000) Reissue treasury stock - - - 30,000 - 120,000 150,000 Net income - - - - 800,000 - 800,000 Stock dividend - 12,000 - 40,000 (52,000) - - Balance on December 31 $5,000,000 $612,000 $100,000 $1,470,000 $429,000 $(220,000) $7,391,000 (c) Stockholders’ Equity Capital stock: Preferred stock, $100 par value, 6%, cumulative, 50,000 shares issued and outstanding $5,000,000 Common stock, $3 par value, 204,000 shares issued, and 184,000 shares outstanding 612,000 $5,612,000 Additional paid-in capital: Paid-in capital in excess of par -- preferred stock $ 100,000 Paid-in capital in excess of par -- common stock 1,470,000 1,570,000 Total paid-in capital $7,182,000 Retained earnings 429,000 $7,611,000 Less: Treasury stock, 20,000 shares at cost (220,000) Total stockholders’ equity $7,391,000

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