On January 5, 2012, Phelps Corporation

On January 5, 2012, Phelps Corporation received a charter granting the right to
issue 5,200 shares of $103 par value, 8% cumulative and nonparticipating preferred stock,
and 53,800 shares of $11 par value common stock. It then completed these transactions.
Jan.
11

Issued 20,490 shares of common stock at $17 per share.

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Feb. 1

Issued to Sanchez Corp. 4,500 shares of preferred stock for the following assets: equipment with a fair value
of $59,700; a factory building with a fair value of $166,100; and land with an appraised value of $326,700.

July
29

Purchased 1,990 shares of common stock at $19 per share. (Use cost method.)

Aug.
10

Sold the 1,990 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 $175,820 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.)
Date
January 11

February 1

July 29
August 10

December 31
December 31

Account Titles and Explanation

Debit

Credit

(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.)
PHELPS CORPORATION
Stockholders’ Equity
December 31, 2012
$

$

$