Question
Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31
Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31 per share. On June 30, Knapp declared a cash dividend of $1.50 per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On November 1, Knapp reacquired 320,000 of its own shares of stock for $36 per share. On December 22, Knapp resold 160,000 of these shares for $42 per share.
Required:
- Prepare all of the necessary journal entries to record the events described above.
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Record the issue of 1,600,000 authorized shares of $2 par value for $31 per share.
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Record the declaration of the cash dividends of $1.50 per share.
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Record the payment of the cash dividends of $1.50 per share.
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Record the repurchase of 320,000 shares for $36 per share.
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Record the reissue of 160,000 share for 42 per share.
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- Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming that the net income for the year was $8,500,000.
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