Major League Apparel has two classes of stock authorized

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Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par
value common. The following transactions affect stockholders' equity during 2012, its first year
of operations:January 2 Issue 100,000 shares of common stock for $60 per share.February 14
Issue 50,000 shares of preferred stock for $11 per share.May 8 Repurchase 10,000 shares of
its own common stock for $50 per share.May 31 Reissue 5,000 shares of treasury stock for $55
per share.December 1 Declare a cash dividend on its common stock of $0.50 per share and a
$25,000 (5% of par value) cash dividend on its preferred stock payable to all stockholders of
record on December 15. The dividend is payable on December 30.December 30 Pay the cash
dividends declared on December 1.Required:1. Record each of these transactions.2. Prepare
the stockholders' equity section of the balance sheet as of December 31, 2012. Net income for
the year was $480,000.View Solution:
Major League Apparel has two classes of stock authorized 5

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