Entries for Selected Corporate Transactions

Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Tolbert Enterprises Inc., with balances on January 1, 2014, are as follows:

Common Stock, $10 stated value (500,000 shares authorized, 340,000 shares issued) $3,400,000

Paid-In Capital in Excess of Stated Value-Common Stock 650,000

Retained Earnings 7,720,000

Treasury Stock (34,000 shares, at cost) 510,000

The following selected transactions occurred during the year:

Jan. 4. 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 $42,840.

Apr. 3. Issued 65,000 shares of common stock for $1,170,000.

June 6. Sold all of the treasury stock for $612,000.

July 1. 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 1.

Nov. 10. Purchased 21,000 shares of treasury stock for $420,000.

Dec. 27. Declared a $0.17-per-share dividend on common stock.

31. Closed the credit balance of the income summary account, $8,029,000.

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. 3,400,000 650000 Dec. 31 Bal.

Paid-In Capital in Excess of Stated Value-Common Stock Jan. 1 Bal. 650,000 650000 272000 Dec. 31 Bal.

Retained Earnings 7720000 Jan. 1 Bal. 7,720,000 7720000 Dec. 31 Bal.

Treasury Stock Jan. 1 Bal. 510,000 612000 399000 Dec. 31 Bal.

Paid-In Capital from Sale of Treasury Stock

Stock Dividends Distributable

Stock Dividends

Cash Dividends

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

Jan. 4. 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 $42,840.

Date Account Debit Credit Jan. 4 42840 42840

Apr. 3. Issued 65,000 shares of common stock for $1,170,000.

Date Account Debit Credit Apr. 3 1170000 650000 520000

June 6. Sold all of the treasury stock for $612,000. Date Account Debit Credit June 6 612000 510000 102000

July 1. 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 1

Aug. 15. Issued the certificates for the dividend declared on July 1. Date Account Debit Credit Aug. 15

Nov. 10. Purchased 21,000 shares of treasury stock for $420,000.

Date Account Debit Credit Nov. 10 Dec. 27.

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

Date Account Debit Credit Dec. 27 Dec. 31.

Closed the credit balance of the income summary account, $8,029,000.

Date Account Debit Credit Dec. 31 Dec. 31.

Closed the two dividends accounts to Retained Earnings. Date Account Debit Credit Dec. 31 3. Prepare a retained earnings statement for the year ended December 31, 2014. Tolbert Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 2014 4.

Prepare the Stockholders' Equity section of the December 31, 2014, balance sheet.

Tolbert Enterprises Inc. Stockholders' Equity As of December 31, 2014 Paid-In-Capital: Total Paid-In Capital Total Total Stockholders' Equity