Question

balances on January 1, 20Y6, are as follows Morrow Enterprises inc. manufactures bathroom fotures. Morrow Enterprises stockholders eavaty accounts, with Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issue) 7.500.000 825,000 Paid-In Capital in Excess of Stated Value-Common Stock 33,600 000 Retained Eamings 450,000 Treasury Stock (25,000 shares, at cost The following selected transactions occurred during the year Jan 22 Paid cash dvidends of s0.08 per share on the common atock The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,000 Issued 75,000 shares of common stock for $24 per share Apr 10 Sold all of the reasuty.stack for $26 per share Jun 6 Decared a 4% atastadend on common stock, to b. Capitalized at the market price of the stock, Jut 5 which is $25 per share Aug 15 issued shares of stock for the stock dividend deciared on July 5 No 23 Purchased 30.000 shares of treasury stock for $19 per share 28 Declared a 50 10-per-share dividend on common stock Dec 31 Closed the credit barance of the income summary account $1.1 31 Cosed the too dividends accounts to Retained Earning Required: 1. Enter the January 1 baiances in T accounts for the stockhoiders equity accounts listed 2 Journaize the entnes to record the transactions, and post to the eight se iected accounts No post ref is required in the journal Refer to the Chart of Accounts for exact wording of account aties statemet for the year ended December 3, 20Y6 For those boxes in which you must enter subtracited or negative 3 Prepare a cela ned saminps numbers use a minus sign section of the December 31 2096 baiance sheet For thope bores in which you must enter subtracted or 4 Prepare the Stocknoiders Equity s negatve numbers use a minus sign Reter to the t ot Amount Descriptions provided for the exect wording of the anower choices for test entries Morrow Enterprises Inc. manufactures bathroom foxtures. Morrow Enterprises stockholders equity accounts, with balances on January 1, 20Y6, are as follows $7.500,000 Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued) 825,000 Paid-in Capital in Excess of Stated Value Common Stock 33,600.000 Retained Earnings 450,000 Treasury Stock (25,000 shares, at cost The following selected transactions occurred during the year Jan. 22 Paid cash dividends of so 08 per share on the common stock The dividend had been propeny recorded when declared on December 1 of the preceding fiscal year for $28,000. Apr. 10 Issued 75,000 shares of common stock for $24 per share 6 Sold all of the treasury stock for $26 per share Jun. 5 Declared a 496 stock dividend on common stock, to be capitalized at the market price of the which is $25 per share 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 Declared a s0 10-per-share dividend on common stock 28 Dec 31 Closed the credit balance of the income summary account 51.125 000 31 Closed the two dividends accounts to Retained Earnings Required: 1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed 2. Journalize the entries to record the transactions, and post to the eight selected accounts No post ref is required in the journal. Refer to the Chart of Accounts for exact wording of account tities 3. Prepare a retained eanings statement for the year ended December 31, 20Y6 For those boxes in which you must enter subtracted or negative numbers use a minus sign 4. Prepare the Stockholders' Equity section of the December 31, 20Y6, balance sheet For those boxes in which you must enter subtractedor negative numbers use a minus sign Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries

Answer 1

Morrow Enterprises Common Stock Jan-01 Bal 7500000 Apr-10 Dec-31 Bal 9360000 Aug-15 360000 9360000 9360000 Paid in Capital in excess of par-CS Jan-01 Bal 825000 Apr-10 300000 Dec-31 Bal 1215000Jul-05 90000 1215000 1215000 Retained Earnings Dec-31 493800 Jan-01 Bal 33600000 Dec-31 Bal 34231200 1125000 34725000 34725000 Treasury Stock Jan-01 Bal 450000Jun-06 450000 570000 Dec-31 Bal Nov-23 570000 1020000 1020000 Paid in Capital in excess of par -TS 200000 Jun-06 Dec-31 Bal 200000 Stock Dividends Distributable 360000Jul-05 360000 Aug-15 360000 360000 Stock Dividends ul-05 450000 Dec-31 450000 450000 450000 Cash Dividends 43800 Dec-31 Dec-28 43800 43800 43800

Journal Enteries Debit in $ Credit in $ Date Particulars Cash Dividends Payable a/c Dr Jan-22 To Cash 28000 [(375000 25000)]x 0.08 Apr-10 Cash a/c To Common Stock To Paid in Capital in excess of stated value CS 300000 (75000 X 24) ;75000 x 20; 75000 x (24-20) Jun-06 Cash a/c 650000 To Treasury Stock 450000 To Paid in Capital in excess of stated value TS 25000 x 26-650000 ; 25000 x 18 = 450000 ; 25000 x ( 26-18) = 200000 Stock Dividends a/c Jul-05 Dr. 450000 To Stock Dividends Distributable 360000 To Paid in Capital in excess of stated value CS (37500075000) x 4% x $25 450000 18000 x20 360000;18000 x (25 - 20)90000 Stock Dividends Distributable a/c Aug-15 Dr 360000 To Common Stock 360000 Treasury Stock a/c Nov-23 Dr. 570000 To Cash 570000 Dec-28 Cash Dividends a/c Dr 43800 To Cash Dividends Payable 43800 375000 + 75000 + 18000-30000 ) x 0.10 = 43800 Income Summary a/c Dec-31 Dr 1125000 To Retained Earnings 1125000 Dec-31 Retained Earnings a/c Dr. 493800 To Stock Dividends 450000 To Cash Dividends 43800

Retained Earnings Statement For the Year ended 31.12.20y6 Beginning 33600000 Net Income 1125000 Less:Cash Dividends -43800 Stock Dividends -450000 631200 Ending 34231200 Stockholders Equity For the Year ended 31.12.20y6 Paid in Capital: Common Stock $20 stated value (500000 shares authorized, 468000 shares issued) 9360000 Excess of issue price over stated value 1215000 From sale of Treasury stock 200000 Total Paid in Capital 10775000 Retained Earnings 34231200 Total 45006200 Deduct Treasury Stock (30000 shares at cost) 570000 Total Stockholders Equity 44436200