CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 15 Incomplete answer Points ou

Question

CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 15 Incomplete answer Points out of 20.00 P Flag question Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $3 par value, 300,000 shares authorized, 60,000 shares 180,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 240,000 15,000 255,000 174,000 609,000 69,000 540,000 From treasury stock Retained earnings Less: Treasury stock (6,000 shares) at cost Total Stockholdersã Equity The following transactions affecting stockholdersae equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock for $10 cash per share Mar. 12 Sold all of the treasury shares for $14 cash per share. june 30 stock was $12 per share Deciared a five percent stock dividend on all outstanding shares of common stock. The market value of the

Explanation / Answer

Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 8-Jan Cash                                                                                    150,000 15,000 Shares X $10 Common Stock            45,000 15,000 Shares X $3 Additional Paid in Capital in excess of Par          105,000 15,000 Shares X $7 (Record the issue of Common Stock - 15,000 Shares) 12-Mar Cash                                                                                      84,000 6,000 Shares X $14 Treasury Stock            69,000 6,000 Shares X $11.50 Additional Paid in Capital - Treasury            15,000 6,000 Shares X $2.50 (Record the issue of Treasury Stock) 30-Jun Stock Dividend            45,000 75,000 shares X 5% X $12    Stock Dividend Payable            11,250 3,750 Shares X $3    Additional Paid in Capital in excess of Par            33,750 3,750 Shares X $9 (Record the stock dividend declared) 10-Jul Stock Dividend Payable            11,250    Common Stock            11,250 (Record the issue of stock dividend declared) 7-Oct Treasury Stock                                                                32,500 2,500 Shares X $13    Cash            32,500 2,500 Shares X $13 (record the treasury stock purchased) 18-Dec Cash Dividends            76,250 76,250 Shares X $1 Cash Dividends Payable            76,250 76,250 Shares X $1 (Record the cash dividend declared) 31-Dec Income Summary                                                 Dr.          170,500 Retained Earnings          170,500 (Record the net income earned) 31-Dec Retained Earnings          121,250 Stock Dividend            45,000 Cash Dividends            76,250 (To close the dividends accounts) Answer b. NIGHT CORPORATION Statement of Stockholders' Equity As on Dec 31 Common Stock Paid in Capital in excess of Par Paid in Capital From Treasury Stock Retained Earnings Treasury stock Total Balance, Jan 1       180,000.00       240,000.00         15,000.00         174,000.00    (69,000.00)       540,000.00 15,000 Shares issued          45,000.00       105,000.00       150,000.00 6,000 Treasury shares Sold         15,000.00      69,000.00         84,000.00 Stock Dividends Issued          11,250.00         33,750.00         (45,000.00)                        -   2,500 Treasury shares acquired    (32,500.00)       (32,500.00) Cash Dividends Declared         (76,250.00)       (76,250.00) Net Income         170,500.00       170,500.00 Total       236,250.00       378,750.00         30,000.00         223,250.00    (32,500.00)       835,750.00

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