Stockholders\' Equity: Transactions and Statement The stockholders\' equity sect
ID: 2599402 • Letter: S
Question
Stockholders' Equity: Transactions and Statement
The stockholders' equity section of Night Corporation's balance sheet at January 1 follows:
The following transactions affecting stockholders’ equity occurred during the year:
Required
a. Prepare journal entries to record the foregoing transactions.
Issued shares of common stock.
Sold shares of treasury stock.
Declared stock dividend.
Issued shares of common stock declared as dividend.
Purchased shares of common stock for treasury.
Declared cash dividend.
To close the income summary account.
To close the dividend accounts.
b. Prepare a statement of stockholders’ equity. Net income for the year is $170,500.
Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances).
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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 From treasury stock 15,000 255,000 Retained earnings 174,000 609,000 Less: Treasury stock (6,000 shares) at cost 69,000 Total Stockholders’ Equity 540,000Explanation / Answer
date
explanation
debit
credit
8-Jan
cash
150000
common stock
45000
additional paid in capital
105000
12-Mar
cash
84000
treasury stock
69000
additional paid in capital on treasury stock
15000
30-Jun
stock dividend
45000
stock dividend distributable
45000
10-Jul
stock dividend distributable
45000
common stock
11250
additional paid in capital
33750
7-Oct
treasury stock
32500
cash
32500
18-Dec
cash dividend
76250
cash dividend payable
76250
31-Dec
income summary
170500
retained earning
170500
31-Dec
retained earning
121250
stock dividend
45000
cash dividend
76250
Paid-in-Capital
Total
Common
Paid-in-Capital
from
Retained
Treasury
Stock
in Excess of Par
Treasury Stock
Earnings
Stock
Balance, January 1
180000
240000
15000
174000
69000
540000
Common shares issued
45000
105000
0
0
0
150000
Answer
Treasury shares sold
0
0
0
15000
69000
84000
Stock Dividends Issued
11250
33750
45000
Answer
Treasury shares acquired
-32500
-32500
Cash Dividends Declared
-76250
-76250
Net Income
170500
170500
Balance, December 31
11250
378750
15000
283250
105500
880750
date
explanation
debit
credit
8-Jan
cash
150000
common stock
45000
additional paid in capital
105000
12-Mar
cash
84000
treasury stock
69000
additional paid in capital on treasury stock
15000
30-Jun
stock dividend
45000
stock dividend distributable
45000
10-Jul
stock dividend distributable
45000
common stock
11250
additional paid in capital
33750
7-Oct
treasury stock
32500
cash
32500
18-Dec
cash dividend
76250
cash dividend payable
76250
31-Dec
income summary
170500
retained earning
170500
31-Dec
retained earning
121250
stock dividend
45000
cash dividend
76250
Paid-in-Capital
Total
Common
Paid-in-Capital
from
Retained
Treasury
Stock
in Excess of Par
Treasury Stock
Earnings
Stock
Balance, January 1
180000
240000
15000
174000
69000
540000
Common shares issued
45000
105000
0
0
0
150000
Answer
Treasury shares sold
0
0
0
15000
69000
84000
Stock Dividends Issued
11250
33750
45000
Answer
Treasury shares acquired
-32500
-32500
Cash Dividends Declared
-76250
-76250
Net Income
170500
170500
Balance, December 31
11250
378750
15000
283250
105500
880750