Accounting

McDougall Corporation is authorized to issue 500,000 shares of $40 par value, 10 percent cumulative preferred stock and 2,000,000 shares of $0.01 par value common stock. The following transactions summarize the events affecting its capital stock accounts during its first year of operations:

1. The company issued 800,000 shares of common stock for cash of $20 per share.

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2. 100,000 shares of preferred stock were sold for cash of $44 per share.

3. McDougall repurchased and held as treasury stock 10,000 shares of its own common stock at $19 per share.

4. 2,000 shares of the treasury stock were reissued at $23 per share.

Required:

A. Make the entries to record these events.

B. Prepare the shareholders’ equity section of McDougall’s balance sheet assuming Retained Earnings has a credit balance of $276,000.

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