Question

Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders' equity accounts, with balances on January 1, 2041, are as follows: Common Stock, $10 stated value (300,000 shares authorized, $2,000,000 200,000 shares issued) 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. 15. 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. Mar. Sold all of the treasury stock for $17 per share. 15. Apr. Issued 40,000 shares of common stock for $720,000. 13. June Declared a 4% stock dividend on common stock, to be capitalized at the market price of the 14. stock, which is $20 per share. July 16. Issued shares of stock for the stock dividend declared on June 14. Oct. 30. Purchased 13,000 shares of treasury stock for $19 per share. Dec. Declared a $0.16-per-share dividend on common stock. 30. 31. Closed the two dividends accounts to Retained Earnings. Required:

Answer 1

Credit Calculation Nav-Go Enterprises Date Account 15-Jan Cash Dividends Payable Cash Debit 23,400 23,400 340,000 =20,000*17 15-Mar Cash Treasury Stock Paid in Capital from Sale of Treasury Stock 280,000 60,000 720,000 13-Apr Cash Common Stock Paid in Capital in Excess of Stated Value-CS 400,000 =40,000*10 320,000 192,000 14-Jun Stock Dividends Stock Dividends Distributable Paid in Capital in Excess of Stated Value-cs 9600*20 96,000 9600*10 96,000 96,000 16-Jul Stock Dividends Distributable Common Stock 96,000 247,000 =13,000*19 30-Oct Treasury Stock Cash 247,000 37,856 Workings below 30-Dec Cash Dividends Cash Dividends Payable 37,856 229,856 31-Dec Retained Earnings Stock Dividends Cash Dividends 192,000 37,856 Workings Cash Dividends Opening Shares 13-Apr Shares Issued Subtotal 14-Jun 4% Stock Dividends Number of Common Shares Issued 30-Oct Treasury Stock Number of Common Shares Outstanding Cash Dividend per share 30-Dec Cash Dividends 240000*4% 200,000 40,000 240,000 9,600 249,600 (13,000) 236,600 0.16 37,856 236600*0.16

Nav-Go Enterprises T Accounts Date Debit Date Credit Common Stock Jan 1. Bal $ 2,000,000 13-Apr $ 400,000 16-Jul $ 96,000 Date Debit Date Credit Paid in Capital in Excess of Stated Value-CS Jan 1. Bal $ 400,000 13-Apr $ 320,000 14-Jun $ 96,000 Date Debit Date Credit Retained Earnings 31-Dec $ 229,856 Jan 1. Bal $ 4,540,000 31-Dec $ 6,136,000 Date Debit Date Credit Treasury Stock Jan 1. Bal $ 280,000 15-Mar $ 280,000 30-Oct $ 247,000 Dec. 31 Bal $2,496,000 Paid in Capital from Sale of Treasury Stock 15-Mar $ 60,000 Dec. 31 Bal $ 816,000 Stock Dividends Distributable 16-Jul $ 96,000 14-Jun $ 96,000 Dec. 31 Bal $10,446,144 Dec. 31 Bal $247,000 Stock Dividends Cash Dividends 14-Jun $ 192,000 31-Dec $ 192,000 30-Dec $ 37,856 31-Dec $ 37,856 Dec. 31 Bal $ 60,000 Dec. 31 Bal $ Dec. 31 Bal $ Dec. 31 Bal $

Nav-Go Enterprises Statement of Stockholders Equity For the Year Ended December 31, 2011 Balance, January 1 Issued common stock Net Income Cash Dividends Stock Dividends Sale of Treasury Stock Purchase of Treasury Stock Balance, December 31 Paid in Capital in Excess Paid in Capital from Common Stock of Stated Value Sale of Treasury Stock Retained Earnings Treasury Stock Total Equity 2,000,000 400,000 4,540,000 (280,000) 6,660,000 400,000 320,000 720,000 6,136,000 6,136,000 (37,856) (37,856) 96,000 96,000 (192,000) 60,000 280,000 340,000 (247,000) (247,000) 2,496,000 816,000 60,000 10,446,144 (247,000) 13,571,144

Nav-Go Enterprises Balance Sheet - Partial As of December 31, 20Y1 Stockholders Equity Paid in Capital Common Stock - $10 stated value (300,000 Shares Authorized, 249,600 Shares Issued & 236,600 Shares Outstanding) Excess of Issue Price Over Stated Value From Sale of Treasury Stock Total Paid in Capital Retained Earnings Total Less: Treasury Stock (13,000 shares @ cost $19 per share) Total Stockholders Equity 2,496,000 816,000 60,000 3,372,000 10,446,144 13,818,144 (247,000) 13,571,144