Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$25 par value, 50.000 shares authorized, 32,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained egenings Total stockholders' equity $ 800,000 64,000 347,000 $ 1,211,000 During the current year, the following transactions affected its stockholders' equity accounts, January 2 Purchased 3,200 shares of its own stock at $25 cash per share. January 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record. February 28 Paid the dividend declared on January 7. July 9 Sold 1,280 of its treasury shares at $30 cash per share. August 27 Sold 1,600 of its treasury shares at $21 cash per share. September 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. October 22 Paid the dividend declared on September 9. December 31 Closed the $54,000 credit balance (from net income) in the ncome Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the current year ended December 31 3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year. Required 1 Required 2 Required 3 Prepare journal entries to record each of these transactions. No Date Debit Credit General Journal Treasury stock, common 1 January 02 80,000 80,000 2 January 07 43,200 Retained earnings Common dividend payable SIS 43,200 3 February 28 43.200 Common dividend payable Cash ols 43,200 4 July 09 38,400 Cash Treasury stock, common Paid-in capital, treasury stock Solo 32,000 6,400 5 August 27 Cash Paid-in capital, treasury stock Retained earnings Treasury stock, common 33,600 4,800 1,600 X 40,000 X 6 > September 09 63,360 Retained earnings Common dividend payable 63,360 7 October 22 63,360 Common dividend payable Cash lo 63,360 8 December 31 54,000 Income summary Retained earings 54,000 Required Required 2 > Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the current year ended December 31. (Amounts to be deducted should be indicated by a minus sign.) ALEX CORPORATION Statement of Retained Earnings For Current Year Ended December 31 Retained earnings, December 31, prior year s 347.000 Plus net income 54,000 Less cash dividends declared (1,600) Retained earnings, December 31, current year $ 399,400 Required 1 Required 2 Required 3 Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year. (Ar should be indicated by a minus sign.) ALEX CORPORATION Stockholders' Equity Section of the Balance Sheet December 31 Common stock - $25 par value $ 800,000 Paid-in capital in excess of par value, common stock 64,000 Retained earnings 399,400 Less: Cost of treasury stock Total stockholders' equity $ 1,263,400 OI
