Question

Aug. 15. Issued shares of stock for the stock dividend declared on July 5. Nov. 23. Purchased 30,000 shares of treasury stock for $19 per share. Dec. 28. Declared a $0.10-per-share dividend on common stock. 31. Closed the two dividends accounts to Retained Earnings. Instructions 1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Divi- dends Distributable; Stock Dividends; Cash Dividends. 2. Journalize the entries to record the transactions, and post to the eight selected accounts. Assume that the closing entry for revenues and expenses has been made and post net income of $1,125,000 to the retained earnings account. 3. Prepare a statement of stockholders' equity for the year ended December 31, 20Y6. Assume that net income was $1,125,000 for the year ended December 31, 20Y6. 4. Prepare the "Stockholders' Equity" section of the December 31, 20Y6, balance sheet.

Answer 1

ANSWER

Requirement 1: common stock Jan 1 balance $ 7,500,000 Apr. 10 Aug.15 Dec. 31 balance $ 1,500,000 $ 360,000 9,360,000 Paid in capital in excess of stated value Jan 1 balance $ 825,000 300, $ Apr. 10 July. 5 90,000 $ Dec. 31 balance 1,215,000 Retained earnings $ 493,800 Jan 1 balance $33,600,000 Dec. 31 Dec. 31 Dec. 31 balance 1,125,000 $34,231,200 Treasury stock 450,000 June. 6 $ Jan 1 balance 450,000 $ Nov. 23 570,000 Dec. 31 balance $ 570,000

Paid in capital frm sale of treasury stock June. 6 200,000 Dec. 31 balance $ 200,000 Stockdividends distributable 360,000 July. 5 Aug. 15 360,000 Dec. 31 balance Stock dividends $ 450,000 Dec. 31 July.5 450,000 Dec. 31 balance $ Cash dividends 43,800 Dec. 31 Dec. 28 43,800 Dec. 31 balance 0

Requirement 2 : Credit General journal Debit Date Cash dividends payable Jan.22 28,000 cash 28,000 $ 1,800,000 Cash Apr. 10 $ 1,500,000 $ 300,000 common stock paid in capital in excess ofstated value June. 6 Cash 650,000 $ 450,000 treasury stock Paid in capital from sale of treasury stock $ 200,000 Stockdividends $ 450,000 July. 5 $ 360,000 Stock dividends distributable Paid in capital in excess of stated value $ 90,000 Stock dividends distributable 360,000 Aug. 15 $ 360,000 common stock $ 570,000 Treasury stock Nov. 23 $ 570,000 Cash Cash dividends Dec. 28 43,800 cash dividends payable 43,800

Income summary $1,125,000 Dec. 31 $ 1,125,000 Retained earnings $ 493,800 Retained earnings Dec, 31 Stock dividends 450,000 cash dividends $ 43,800 Requirement 3: MORROW ENTERPRISES INC Retained earnings statement For the period ended dec 31, 20x6 Retained earnings (jan 1, 20x6) net income Less: cash dividends 33,600,000 $1,125,000 $ (43,800) $ (450,000) Stock dividends Increasein retained earnings Retained earnings ( Dec 31, 20x6) $ 631,200 $34,231,200 A

requirement 4 MORROW ENTERPRISES INC Balance sheet For the period ended dec 31, 20x6 Stockholder's equity Paid in capital: Commonstock $ 20 stated value (500,000 shares authorized, 468,000 shares issued $ 9,360,000 Excess of issue price over stated value From sale of treasury stock Total paid up capital Retained earnings Total Less : Treasury stock (30,000 shares at cost) Total stockholderse equity 1,215,000 $ 200,000 10,775,000 34,231,200 45,006,200 (570,000) $ $44,436,200

_____________________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************