Problem 11-2A Date Account Titles and Explanation Debit Credit (To record net in
ID: 2497529 • Letter: P
Question
Problem 11-2A
Date
Account Titles and Explanation
Debit
Credit
(To record net income)
(To close cash dividends)
(To record payment of cash dividends payable)
Preferred Stock
Common Stock
Paid-in Capital in Excess of Par Value—Preferred Stock
Paid-in Capital in Excess of Stated Value—Common Stock
Retained Earnings
Cash Dividends
Treasury Stock
MILEY CORPORATION
Partial Balance Sheet
December 31, 2014
Problem 11-2A
The stockholders’ equity accounts of Miley Corporation on January 1, 2014, were as follows.Preferred Stock (7%, $100 par noncumulative, 4,900 shares authorized) $294,000 Common Stock ($3 stated value, 337,700 shares authorized) 810,480 Paid-in Capital in Excess of Par Value—Preferred Stock 14,700 Paid-in Capital in Excess of Stated Value—Common Stock 270,160 Retained Earnings 694,800 Treasury Stock—(4,900 common shares) 39,200
During 2014, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 5,100 shares of common stock for $30,600. Mar. 20 Purchased 1,490 additional shares of common treasury stock at $9 per share. Oct. 1 Declared a 7% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1. Dec. 1 Declared a $0.60 per share cash dividend to common stockholders of record on December 15, payable December 31, 2014. Dec. 31 Determined that net income for the year was $282,700. Paid the dividend declared on December 1.
Explanation / Answer
Date Account Title and Explanation Debit Credit Feb 1 Cash 30,600 Paid -in Capital 30,600 ( To record issue of 5,100 shares of common stock) March 20 Treasury Stock 13,410 Cash 13,410 ( To record purchase of 1490 own shares at $ 9 per share) Nov 1 Preferred dividends 20,580 Cash 20,580 ( To record payment of dividends on preferred stock) Dec 31 Dividends 161,202 Cash 161,202 ( To record payment of dividends to common stockholders @ 0.60 per share) Dec 31 Net income 282,700 Retained earnings 282,700 ( To record transfer of net income for the year to retained earnings)