Exercise 11-18 Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 18 Alexander C ation reports the following nts of stockholders equity on December 31, 2016 44,000 shares Ansued and outstanding 01,100,00o Paid-in eapital in excess of par value, conon stook Retained earninge 389,000 Total stockholdera equity In year 2017, the following transactions affected its stockholders' equity accounts Jan. 2 Purchased 4,400 shares of its own stock at $25 cash per share. Jan. 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the rebruary 9 stoekholders of Feb. 28 Paid the dividend declared on January ug 27 Sold 2,200 of its treasury shares at $20 cash per share. Sept. Directors declared a $2 per share cash dividend payable on October 22 to the Septesber 23 stockholders of oet. 22 Paid the dividend declared on September 9. Dec. 31 closed the $66,000 credit balance (from net Ancome) in the Income Summary account to Retained Earnings record Required: 1. Prepare journal entries to record each of these transactions for 2017 2. Prepare a statement of retained earnings for the year ended December 31, 2017 3. Prepare of the company's balance sheet as of December 31, 2017 Jan 02 Treasury stock, common 110,000 Cash 110,000 2 Jan 07 Retained earnings 59,400 Common dividend payable 59,400 2 | 3 | Feb 28 Common dividend payable 59,400 ook Cash 59,400 dint sk rint Jul 09 Cash 52,800 8,800 Paid-in capital, treasury stock Treasury stock, common 44,000 rences 44,000 8,800 2,200 Aug 27Cash Paid-in capital, treasury stock Retained earnings Treasury stock, common 55,000 Sep 09Retained earnings 87,120 Common dividend payable 87,120 Oct 22 Common dividend payable 87,120 Cash 87,120 2 Jan 07 Retained earnings 59,400 Common dividend payable 59,400 31 Feb 28 Common dividend payable 59,400 Cash 59,400 4 Jul 09 Cash 52,800 Paid-in capital, treasury stock Treasury stock, common 8,800 44,000 44,000 8,800 2,200 5 Aug 27 Cash Paid-in capital, treasury stock Retained earnings Treasury stock, common 55,000 Sep 09Retained earnings 87,1 Common dividend payable 87,120 7 Oct 22 Common dividend payable 87,120 Cash 87,120 8Dec 31 Income summary 66,000 Retained earnings 66,000 Required 1Required 2 Required 3 Prepare a statement of retained earnings for the year ended December 31, 2017. (Amounts to be de indicated by a minus sign.) ALEXANDER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2017 Retained earnings, December 31,2016 Add: Net income 389,000 66,000 $ 455,000 2,200 146,520 603,720 Less: Treasury stock reissuances Less: Cash dividends declared Retained earnings, December 31, 2017 Required 1 Required 2Required 3 Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2017, (Amounts to be should be indicated by a minus sign.) ALEXANDER CORPORATION Stockholders' Equity Section of the Balance Sheet December 31, 2017 Common stock-$25 par value Paid-in capital in excess of par value, common stock Retained earnings Less cost of treasury stock Total stockholders' equity $ 1,100,000 88,000 306,280 $ 1,494,280
