Question

kequirea a. Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 124 Record the issue of 1,700,000 authorized shares of $2 par value for $33 per share. Note: Enter debits before credits. Debit Credit Record entry Clear entry View general journal b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2015 assuming that the net income for the year was $9,500,000 HOUGHTON COMPANY Stockholders' Equity Balance Sheet as of 12/31/2015 Total Stockholders' Equilty

Houghton Company began business on January 1, 2015 by issuing all of its 1,700,000 authorized shares of its $2 par value common stock for $33 per share. On June 30, Houghton declared a cash dividend of $2.00 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 340,000 of its own shares of stock for $38 per share. On December 22, Houghton resold 170,000 of these shares for $44 per share.

Required:

a.	Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Account title and explanation Debit Date Credit Jan. 1, 2015 Cash (1,700,000*$33) $56,100,000 Common stock (1,700,000*$2 Paid in capital in excess of par-Common stock $3,400,000 $52,700,000 June 20, 2015 Cash dividend (1,700,000*$2) $3,400,000 Dividend payable $3,400,000 August 30, 201Dividend payable $3,400,000 Cash $3,400,000 $12,920,000 Nov. 1, 2015 Treasury stock Cash (340,000 $38 12,920,000 Dec. 22, 2015 Cash (170,000* $A4) $7,480,000 $6,460,000 $1,020,000 Treasury stock (170,000 $38 Paid in capital from treasury stock HOUGHTON COMPANY Stockholders' equity Balance sheet as of 12/31/2015 Common stock Paid in capital in excess of par-Common stock Paid in capital from treasury stock Retained earnings (9,500,000-3,400,000 Total paid in capital and retained earnings Less: Treasury stock Total stockholders' equit $3,400,000 $52,700,000 $1,020,000 6,100,000 $63,220,000 6,460,000 56,760,000