Aspen Industries became a corporation in the state of Colorado on March 23, 2009. The company was

Question:

Aspen Industries became a corporation in the state of Colorado on March 23, 2009. The company was authorized to issue 1 million shares of $6 par value common stock. Since the date of incorporation, aspen industries has entered into the following transactions that affected contributed and earned capital:

1. On March 23, 2009, the company issued 50,000 shares of common stock in exchange for $15 per share

2. On December 5, 2009 the company issued a 10 percent stock dividend. The market value of the stock is $18 per share.

3. On Mays 6, 2010 the company issued 60,000 shares of common stock in exchange for $22 per share.

4. On September 24, 2010, the company repurchased 15,000 shares of its own stock for $25 per share.

5. On December 1, 2010, the company reissued 5,000 shares held in treasury for $27 per share.

6. On February 14, 2011, the company declared a 3:1 stock split and adjusted the par value of the stock

7. On august 19, 2011 the company reissued 8,000 shares held in treasury for $10 per share.

8. On December 27, 2011 the company declared a cash dividend of $ 50,000.

9. On January 3, 2012, the company paid the dividend declared on December 27, 2011.

10. On October 31, 2012, the company reissued 2,000 shares held in treasury for $ 15 per share.

Required

(a) Prepare the necessary journal entries to record these transactions.

(b) Prepare the shareholders’ equity section of Aspen’s balance sheet as of December 31, 2012, assume that net income for 2009, 2010 2011, and 2012 was $400,000, $100,000, $100,000 and $20,000, respectively.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...