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Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises' stockholders' equity, accounts, with balances on January 1,20Y6, are as follows: Common stock, $20 stated value ( 500,000 shares authorized, 367,000 shares issued) $7,340,000 Paid-In Capital in Excess of Stated Value-Common Stock 844,100 Retained Earnings 33,388,000 Treasury Stock (22,800 shares, at cost) 387,600 The following selected transactions occurred during the year: Jan. 22 Paid cash dividends of $0.09 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $30,978. Apr. 10 Issued 71,000 shares of common stock for $23 per share. Jun. 6 Sold all of the treasury stock for $27 per share. Jul. 5 Declared a 3% Stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share. Aug. 15 Issued the certificates for the dividend declared on July 5. Nov. 23 Purchased 28,000 shares of treasury stock for $18 per share. Dec. 28 Declared a $0.09-per-share dividend on common stock. 31 Closed the two dividends accounts to Retained Earnings. Required: 1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed. If required, round your answers to the nearest dollar. 2. Journalize the entries to record the transactions, and post to the eight selected accounts. Assume that the closing entry for revenues and expenses has been made and post net income of $1,131,500 to the retained earnings account. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar. 3. Prepare a statement of stockholders' equity for the year ended December 31,20 Y6. Assume that net income was $1,131,500 for the year ended December 31, 20Y6. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is an amount is zero, enter " 0 ". * 4. Prepare the "Stockholders' Equity" section of the December 31, 20Y6, balance sheet. For those boxes in which you must enter subtracted or negative numbers use a minus sign.* Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries. Common Stock Paid-In Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock Paid-In Capital from Sale of Treasury Stock Stock dividends Distributable Stock dividends Cash Dividends 2. Journalize the entries to record the transactions, and post to the eight selected accounts. Assume that the closing entry for revenues and expenses has been made and post net income o $1,131,500 to the retained earnings account. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar. 3. Prepare a statement of stockholders' equity for the year ended December 31,20Y6. Assume that net income was $1,131,500 for the year ended December 31 , 20Y6. For those boxes in which you must ente subtracted or negative numbers use a minus sign. If there is an amount is zero, enter " 0 ". Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries. 4. Prepare the "Stockholders' Equity" section of the December 31,20Y6 balance sheet. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries. CHART OF ACCOUNTS Morrow Enterprises Inc. General Ledger ASSETS REVENUE 110 Cash 410 Sales 120 Accounts Receivable 610 Interest Revenue 131 Notes Receivable 132 Interest Receivable EXPENSES 141 Inventory 510 Cost of Goods Sold 145 Office Supplies 515 Credit Card Expense 151 Prepaid Insurance 520 Salaries Expense 181 Land 531 Advertising Expense 193 Equipment 532 Delivery Expense 194 Accumulated Depreciation-Equipment 533 Selling Expenses 534 Rent Expense LIABILITIES 535 Insurance Expense 210 Accounts Payable 536 Office Supplies Expense 221 Notes Payable 537 Organizational Expenses 226 Interest Payable 562 Depreciation Expense-Equipment 231 Cash Dividends Payable 590 Miscellaneous Expense 241 Salaries Payable 710 Interest Expense 261 Mortgage Note Payable EQUITY 236 Stock dividends Distributable 311 Common Stock 313 Paid-In Capital in Excess of Stated Value-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock dividends Amount Descriptions Balances, January 1 Balances, December 31 Cash dividends Common stock, $20 stated value ( 500,000 shares authorized, 451,140 shares issued) Excess of issue price over stated value From sale of treasury stock Issued common stock Net income Net loss Purchase of treasury stock Sale of treasury stock Stock dividends Retained Earnings Total Total paid-in capital Total stockholders' equity Treasury stock (28,000 shares at cost)
