Exercise 13-24 (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year. Connon stock-$25 par value, 78,000 shares authorized, 48,000 shares issued and outstanding $ 1.200,000 Paid in capital in excess of par value, common stock 96,000 Retained earnings 483,000 Total stockholders' equity $1,699,000 During the current year, the following transactions affected its stockholders' equity accounts January 2 Purchased 4,800 shares of its own stock at $25 cash per share. January Directors declared $1.50 per share cash dividend payable on February 28 to the February 1 stockholders of record. February 28 Paid the dividend declared on January 7. Saly Sold 1,920 of its treasury shares at $30 cash per share. August 27 Sold 2,490 of its treasury shares at $21 cash per sbare September 9 Directons declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record Detober 22 Paid the dividend declared on September 9. December 31 Closed the $20,000 credit balance (from net income) in the Income Summary ac 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 Answer is not complete. Required 1 Required 2 Required 3 Prepare journal entries to record each of these transactions, No General Journal Credit Date January 02 1 Debit 120,000 Treasury stock, common Cash 120,000 2 January 07 Retained earnings Common dividend payable 64,800 >> 64,800 3 February 28 Common dividend payable Cash 64,800 O 64,800 4 July 09 57,600 Cash Treasury stock, common Paid.in capital, treasury stock 48,000 9,600 5 August 27 Cash Paid in capital treasury stock Retained earnings Treasury stock common 48,000 X 9,600 2,400 XX X EX 60.000 X Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the current year ended December 31. (Amou indicated by a minus sign.) ALEX CORPORATION Statement of Retained Earnings For Current Year Ended December 31 Retained earnings, December 31, prior year S Plus net income Less cash dividends declared Retained earnings, December 31, current year $ 403,000 700,000 X (159 480) X 943,520 O Required 1 Required 2 Required 3 Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year. should be indicated by a minus sign.) ALEX CORPORATION Stockholders' Equity Section of the Balance Sheet December 31 Common stock - S25 par value $ 1,200,000 Paid in capital in excess of par value, common stock 96,000 Retained eamings 301,760 % Loss Cost of treasury stock (12,000) Total stockholders' equity $ 1,585, 760 SOO >
