Problem

At September 30, the end of Excel Company’s third quarter, the following stockholders’ equ...

At September 30, the end of Excel Company’s third quarter, the following stockholders’ equity accounts are reported.

Common stock, $12 par value	$720,000
Paid-in capital in excess of par value, common stock	180,000
Retained earnings	640,000

In the fourth quarter, the following entries related to its equity are recorded.

Oct. 2	Retained Earnings	120,000
Oct. 2	Common Dividend Payable		120,000
Oct. 25	Common Dividend Payable	120,000
Oct. 25	Cash		120,000
Oct. 31	Retained Earnings	150,000
	Common Stock Dividend Distributable		72,000
	Paid-In Capital in Excess of
	Par Value, Common Stock		78,000
Nov. 5	Common Stock Dividend Distributable	72,000
	Common Stock, $12 Par Value		72,000
Dec. 1	Memo—Change the title of the common stock account to reflect the new par value of $4.

Dec. 31	Income Summary	420,000
	Retained Earnings		420,000

Required

1.Explain the transaction(s) underlying each journal entry.

2. Complete the following table showing the equity account balances at each indicated date (include the balances from September 30).

	Oct. 2	Oct. 25	Oct. 31	Nov. 5	Dec. 1	Dec. 31

Common stock	$___	$___	$___	$___	$___	$___
Common stock dividend distributable
Common stock dividend distributable	___	___	___	___	___	___
Paid-in capital in excess of par, common stock
Paid-in capital in excess of par, common stock	___	___	___	___	___	___
Retained earnings
Total equity	$___	$___	$___	$___	$___	$___