Entries for Selected Corporate Transactions

Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises stockholders equity accounts, with balances on January 1, 20Y6, are as follows:

Common Stock, $10 stated value (400,000 shares authorized, 260,000 shares issued)	$2,600,000
Paid-In Capital in Excess of Stated Value-Common Stock	500,000
Retained Earnings	5,900,000
Treasury Stock (26,000 shares, at cost)	364,000

The following selected transactions occurred during the year:

Jan. 22.	Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,080.
Apr. 10.	Issued 50,000 shares of common stock for $800,000.
June 6.	Sold all of the treasury stock for $17 per share.
July 5.	Declared a 5% Stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share.
Aug. 15.	Issued shares of stock for the stock dividend declared on July 5.
Nov. 23.	Purchased 16,000 shares of treasury stock for $19 per share.
Dec. 28.	Declared a $0.15-per-share dividend on common stock.
31.	Closed the credit balance of the income summary account, $6,136,000.
31.	Closed the two dividends accounts to Retained Earnings.

Required:

(a) Record the January 1 balances in T accounts. Record the above transactions in T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place.

(b) Journalize the entries to record the transactions. For a compound transaction, if an amount does not require an entry, leave it blank.

Jan. 22. Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,080.

Apr. 10. Issued 50,000 shares of common stock for $800,000.

June 6. Sold all of the treasury stock for $17 per share.

July 5. Declared a 5% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share.

Aug. 15. Issued shares of stock for the dividend declared on July 5.

Nov. 23. Purchased 16,000 shares of treasury stock for $19 per share.

Dec. 28. Declared a $0.15-per-share dividend on common stock.

Dec. 31. Closed the credit balance of the income summary account, $6,136,000.

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

(c) Prepare a retained earnings statement for the year ended December 31, 20Y6.

(d) Prepare the Stockholders' Equity section of the December 31, 20Y6, balance sheet.