Styles Stockholders\' Equity: Transactions and Statement The stockholders\' equi

Question

Styles 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 issued, 6.000 shares in treasury Additional paid-incapital In excess of par value 180,000 240,000 15.000 255,000 From treasury stock 174,000 Retained earnings 609,000 69,000 Less: Treasury stock (6,000 shares) at cost 540,000 Total StockholdersieTMEquity The following transactions affecting stockholdersaeTM equity occurred during the year Jan. 8 Issued 15,000 shares of previously unissued common stock for $10 cash per share. Mar. 12 Sol all of the treasury

Explanation / Answer

Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 8-Jan Cash                                                                          Dr.          150,000 15,000 Shares X $10 To Common Stock            45,000 15,000 Shares X $3 To 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                                                                           Dr.            84,000 6,000 Shares X $14 To Treasury Stock            69,000 6,000 Shares X $11.50 To Additioanl Paid in Capital - Treasury            15,000 6,000 Shares X $2.50 (Record the issue of Treasury Stock) 30-Jun Retained Earnings                                               Dr.            45,000 75,000 shares X 5% X $12    To Stock Dividend            11,250 3,750 Shares X $3 To Additional Paid in Capital in excess of Par            33,750 3,750 Shares X $9 (Record the stock dividend declared) 10-Jul Stock Dividend                                                     Dr.            11,250    To Common Stock            11,250 (Record the issue of stock dividend declared) 7-Oct Treasury Stock                                                      Dr.            32,500 2,500 Shares X $13    To Cash            32,500 2,500 Shares X $13 (record the treasury stock purchased) 18-Dec Retained Earnings                                               Dr.            76,250 76,250 Shares X $1 To Cash Dividends Payable            76,250 76,250 Shares X $1 (Record the cash dividend declared) 31-Dec Income Summary                                                 Dr.          170,500 To Retained Earnings          170,500 (Record the net income earned) Answer b. Statement of Stockholders' Equity As on Dec 31 Paid-in Capital Common Stock, $3 par Value, 300,000 shares Authorized, 78,750 Shares Issued, 2,500 Shares in Treasury          236,250 Additional Paid in Capital In excess of Par Value          378,750 From Treasury Stock            30,000          408,750 Total Paid In Capital          645,000 Retained Earnings          223,250          868,250 Treasury Stock          (32,500) Total Stockholder's Equity          835,750

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