Entries for Selected Corporate Transactions

Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows:

Common Stock, $10 stated value (900,000 shares authorized, 600,000 shares issued)	$6,000,000
Paid-In Capital in Excess of Stated Value-Common Stock	1,150,000
Retained Earnings	13,620,000
Treasury Stock (60,000 shares, at a cost of $14 per share)	840,000

The following selected transactions occurred during the year:

Jan. 22.	Paid cash dividends of $0.14 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $75,600.
Apr. 10.	Issued 115,000 shares of common stock for $18 per share.
June 6.	Sold all of the treasury stock for $1,020,000.
July 5.	Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.
Aug. 15.	Issued the certificates for the dividend declared on July 5.
Nov. 23.	Purchased 38,000 shares of treasury stock for $722,000.
Dec. 28.	Declared a $0.17-per-share dividend on common stock.
31.	Closed the two dividends accounts to Retained Earnings.

Required:

1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate.

Common Stock
		Jan. 1 Bal.	6,000,000
		Apr. 10June 6July 5Dec. 28Apr. 10	fill in the blank 2
		July 5Aug. 15Jan. 1Dec. 28Aug. 15	fill in the blank 4
		Dec. 31 Bal.	fill in the blank 5

Paid-In Capital in Excess of Stated Value-Common Stock
		Jan. 1 Bal.	1,150,000
		Apr. 10June 6July 5Dec. 28Apr. 10	fill in the blank 7
		Aug. 15June 6July 5Dec. 28July 5	fill in the blank 9
		Dec. 31 Bal.	fill in the blank 10

Retained Earnings
Apr. 10June 6July 5Dec. 31Dec. 31	fill in the blank 12	Jan. 1 Bal.	13,620,000
		Jan. 1June 6Nov. 23Dec. 31Dec. 31	fill in the blank 14
		Dec. 31 Bal.	fill in the blank 15

Treasury Stock
Jan. 1 Bal.	840,000	Apr. 10June 6July 5Dec. 31June 6	fill in the blank 17
Jan. 1June 6Nov. 23Dec. 31Nov. 23	fill in the blank 19
Dec. 31 Bal.	fill in the blank 20

Paid-In Capital from Sale of Treasury Stock
		Jan. 1June 6Nov. 23Dec. 28June 6	fill in the blank 22

Stock Dividends Distributable
Jan. 1Aug. 15Nov. 23Dec. 31Aug. 15	fill in the blank 24	Jan. 1July 5Nov. 23Dec. 31July 5	fill in the blank 26

Stock Dividends
Jan. 1July 5Nov. 23Dec. 31July 5	fill in the blank 28	Jan. 1July 5Nov. 23Dec. 31Dec. 31	fill in the blank 30

Cash Dividends
Jan. 1July 5Nov. 23Dec. 28Dec. 28	fill in the blank 32	Jan. 1July 5Nov. 23Dec. 31Dec. 31	fill in the blank 34

2. Journalize the entries to record the transactions. If an amount box does not require an entry, leave it blank.

Jan. 22. Paid cash dividends of $0.14 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $75,600.

Date	Account	Debit	Credit
Jan. 22	CashCash DividendsCash Dividends PayableCommon StockStock Dividends DistributableCash Dividends Payable	fill in the blank 36	fill in the blank 37
	CashCash DividendsCash Dividends PayableCommon StockStock DividendsCash	fill in the blank 39	fill in the blank 40

Apr. 10. Issued 115,000 shares of common stock for $18.

Date	Account	Debit	Credit
Apr. 10	CashCommon StockPaid-In Capital from Sale of Treasury StockPaid-In Capital in Excess of Stated Value-Common StockTreasury StockCash	fill in the blank 42	fill in the blank 43
	CashCash DividendsCommon StockStock DividendsTreasury StockCommon Stock	fill in the blank 45	fill in the blank 46
	CashCash Dividends PayablePaid-In Capital from Sale of Treasury StockPaid-In Capital in Excess of Stated Value-Common StockPreferred StockPaid-In Capital in Excess of Stated Value-Common Stock	fill in the blank 48	fill in the blank 49

June 6. Sold all of the treasury stock for $1,020,000.

Date	Account	Debit	Credit
June 6	CashCommon StockPaid-In Capital in Excess of Stated Value-Common StockRetained EarningsTreasury StockCash	fill in the blank 51	fill in the blank 52
	CashCommon StockPaid-In Capital in Excess of Stated Value-Common StockRetained EarningsTreasury StockTreasury Stock	fill in the blank 54	fill in the blank 55
	Common StockPaid-In Capital from Sale of Treasury StockPreferred StockRetained EarningsStock Dividends DistributablePaid-In Capital from Sale of Treasury Stock	fill in the blank 57	fill in the blank 58

July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.

Date	Account	Debit	Credit
July 5	CashCommon StockPaid-In Capital in Excess of Stated Value-Common StockStock DividendsStock Dividends DistributableStock Dividends	fill in the blank 60	fill in the blank 61
	CashCommon StockPaid-in Capital from Sale of Treasury StockStock Dividends DistributableTreasury StockStock Dividends Distributable	fill in the blank 63	fill in the blank 64
	CashCash DividendsPaid-In Capital in Excess of Stated Value-Common StockStock DividendsTreasury StockPaid-In Capital in Excess of Stated Value-Common Stock	fill in the blank 66	fill in the blank 67

Aug. 15. Issued the certificates for the dividend declared on July 5.

Date	Account	Debit	Credit
Aug. 15	CashCash Dividends PayableCommon StockStock DividendsStock Dividends DistributableStock Dividends Distributable	fill in the blank 69	fill in the blank 70
	CashCash Dividends PayableCommon StockStock DividendsStock Dividends DistributableCommon Stock	fill in the blank 72	fill in the blank 73

Nov. 23. Purchased 38,000 shares of treasury stock for $722,000.

Date	Account	Debit	Credit
Nov. 23	CashCommon StockPaid-In Capital from Sale of Treasury StockStock DividendsTreasury StockTreasury Stock	fill in the blank 75	fill in the blank 76
	CashCommon StockPaid-In Capital from Sale of Treasury StockStock Dividends DistributableTreasury StockCash	fill in the blank 78	fill in the blank 79

Dec. 28. Declared a $0.17-per-share dividend on common stock.

Date	Account	Debit	Credit
Dec. 28	CashCash DividendsCash Dividends PayableCommon StockTreasury StockCash Dividends	fill in the blank 81	fill in the blank 82
	CashCash Dividends PayableCommon StockStock DividendsStock Dividends DistributableCash Dividends Payable	fill in the blank 84	fill in the blank 85

Dec. 31. Closed the two dividends accounts to Retained Earnings.

Date	Account	Debit	Credit
Dec. 31	CashCash DividendsRetained EarningsStock DividendsStock Dividends DistributableRetained Earnings	fill in the blank 87	fill in the blank 88
	CashCommon StockRetained EarningsStock DividendsStock Dividends DistributableStock Dividends	fill in the blank 90	fill in the blank 91
	CashCash DividendsIncome SummaryRetained EarningsTreasury StockCash Dividends	fill in the blank 93	fill in the blank 94

3. Prepare a retained earnings statement for the year ended December 31, 20Y5. Assume that Morrow Enterprises Inc. had net income for the year ended December 31, 20Y5, of $14,165,000.

Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y5
CashNet IncomeRetained Earnings, December 31, 20Y5Retained Earnings, January 1, 20Y5Treasury StockRetained Earnings, January 1, 20Y5		$fill in the blank 96
Decrease in Retained EarningsNet IncomeRetained Earnings, January 1, 20Y5Retained Earnings, December 31, 20Y5Treasury StockNet Income	$fill in the blank 98
Dividends:
CashCash DividendsRetained Earnings, January 1, 20Y5Retained Earnings, December 31, 20Y5Treasury StockCash Dividends	fill in the blank 100
CashRetained Earnings, January 1, 20Y5Stock Dividends DistributableStock DividendsTreasury StockStock Dividends	fill in the blank 102
Decrease in Retained EarningsIncrease in Retained EarningsRetained Earnings, January 1, 20Y5Retained Earnings, December 31, 20Y5Treasury StockIncrease in Retained Earnings		fill in the blank 104
Decrease in Retained EarningsIncrease in Retained EarningsRetained Earnings, January 1, 20Y5Retained Earnings, December 31, 20Y5Treasury StockRetained Earnings, December 31, 20Y5		$fill in the blank 106

4. Prepare the Stockholders' Equity section of the December 31, 20Y5, balance sheet.

Morrow Enterprises Inc. Stockholders' Equity As of December 31, 20Y5
Paid-In-Capital:
CashCash Dividends PayableCommon Stock, $10 Stated ValueRetained EarningsTreasury Stock (at Cost)Common Stock, $10 Stated Value	$fill in the blank 108
CashCash Dividends PayableExcess of Stated Value-Common StockRetained EarningsTreasury Stock (at Cost)Excess of Stated Value-Common Stock	fill in the blank 110
CashCash Dividends PayablePaid-In Capital, Common StockRetained EarningsTreasury Stock (at Cost)Paid-In Capital, Common Stock		$fill in the blank 112
CashCash Dividends PayableFrom Sale of Treasury StockRetained EarningsTreasury Stock (at Cost)From Sale of Treasury Stock		fill in the blank 114
Total Paid-In Capital			$fill in the blank 115
Cash Dividends PayableExcess of Stated Value-Common StockFrom Sale of Treasury StockRetained EarningsTreasury Stock (Shares at Cost)Retained Earnings			fill in the blank 117
CashCash Dividends PayablePaid-In-Capital in Excess of Stated Value-Common StockRetained EarningsTreasury Stock (at Cost)Treasury Stock (at Cost)			fill in the blank 119
Total Stockholders' Equity			$fill in the blank 120