At December 31, the end of Intertec Communication’s third quarter, the following stockholders’ equity accounts are reported.
Common stock, $10 par value | $480,000 |
Paid-in capital in excess of par value, common stock | 192,000 |
Retained earnings | 800,000 |
In the fourth quarter, the following entries related to its equity are recorded.
Jan. 17 | Retained Earnings | 48,000 |
|
Common Dividend Payable |
| 48,000 | |
Feb. 5 | Common Dividend Payable | 48,000 |
|
Cash |
| 48,000 | |
Feb. 28 | Retained Earnings | 126,000 |
|
| Common Stock Dividend Distributable |
| 60,000 |
Paid-In Capital in Excess of Par Value, Common Stock |
|
66,000 | |
Mar. 14 | Common Stock Dividend Distributable | 60,000 |
|
| Common Stock, $10 Par Value |
| 60,000 |
Mar. 25 | Memo—Change the title of the common stock account to reflect the new par value of $5. |
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Mar. 31 | Income Summary | 360,000 |
|
Retained Earnings |
| 360,000 |
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 December 31).
| Jan.17 | Feb. 5 | Feb. 28 | Mar. 14 | Mar. 25 | Mar. 31 | |
| |||||||
Common stock | $___ | $___ | $___ | $___ | $___ | $___ | |
Common stock dividend distributable |
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___ | ___ | ___ | ___ | ___ | ___ | ||
Paid-in capital in |
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excess of par, common stock | ___ | ___ | ___ | ___ | ___ | ___ | |
Retained earnings | ___ | ___ | ___ | ___ | ___ | ___ | |
Total equity | $___ | $___ | $___ | $___ | $___ | $___ | |
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