Question

Entries for Selected Corporate Transactions Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 2045, are as follows: Common Stock, $10 stated value (300,000 shares authorized, 200,000 shares issued) $2,000,000 Paid-In Capital in Excess of Stated Value-Common Stock 400,000 Retained Earnings 4,540,000 Treasury Stock (20,000 shares, at cost) 280,000 The following selected transactions occurred during the year Jan. 22. Paid cash dividends of $0.13 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $23,400. Apr. 10. Issued 40,000 shares of common stock for $720,000 June 6. Sold all of the treasury stock for $340,000 July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share Aug. 15. Issued the certificates for the dividend declared on July 5. Nov. 23. Purchased 13,000 shares of treasury stock for $247,000. Dec. 28. Declared a $0.16-per-share dividend on common stock 31. Closed the credit balance of the income summary account, $4,722,000 31. Closed the two dividends accounts to Retained Earnings

Answer 1

Common Stock
		Jan 1 Bal	$ 2,000,000
		Apr. 10	$     400,000
		Aug. 15	$       80,000
		Dec 31 Bal	$ 2,480,000
Paid-in Capital in excess of Stated value
		Jan 1 Bal	$     400,000
		Apr. 10	$     320,000
		Jul. 5	$       80,000
		Dec 31 Bal	$     800,000
Retained Earnings
Dec. 31	$     191,200	Jan 1 Bal	$ 4,540,000
		Dec. 31	$ 4,722,000
		Dec 31 Bal	$ 9,070,800
Treasury Stock
Jan 1 Bal	$     280,000	Jun. 6	$     280,000
Nov. 23	$     247,000
Dec. 31 Bal	$     247,000
Paid in Capital from Sale of Treasury Stock
		Jun. 6	$       60,000
Stock Dividend Distributable
Aug. 15	$       80,000	Jul.5	$       80,000
Stock Dividend
Jul.5	$     160,000	Dec. 31	$     160,000
Cash Dividend
Dec. 28	$       31,200	Dec. 31	$       31,200

Date	Account Titles	Debit	Credit
Jan 22	Cash Dividend Payable	$          23,400
	Cash		$          23,400
Apr. 10	Cash	$       720,000
	Common Stock		$       400,000
	Paid in Capital in excess of Stated Value		$       320,000
Jun. 6	Cash	$       340,000
	Treasury Stock		$       280,000
	Paid in capital from Treasury Stock		$          60,000
Jul.5	Stock Dividend	$       160,000
	Stock Dividend Distributable		$          80,000
	Paid in Capital in excess of Stated Value		$          80,000
Aug. 15	Stock Dividend DIstributable	$          80,000
	Common Stock		$          80,000
Nov. 23	Treasury Stock	$       247,000
	Cash		$       247,000
Dec. 28	Cash Dividend	$          31,200
	Cash Dividend Payable		$          31,200
Dec. 31	Income Summary	$    4,722,000
	Retained Earnings		$    4,722,000
Dec. 31	Retained Earnings	$       191,200
	Cash Dividend		$          31,200
	Stock Dividend		$       160,000

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