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Knapp Industries began business on January 1, 2018 by issuing all of its 1,400,000 authorized shares of its $2 par value common stock for $27
Knapp Industries began business on January 1, 2018 by issuing all of its 1,400,000 authorized shares of its $2 par value common stock for $27 per share. On June 30, Knapp declared a cash dividend of $2.75 per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On November 1, Knapp reacquired 280,000 of its own shares of stock for $32 per share. On December 22, Knapp resold 140,000 of these shares for $38 per share.
Required:
- Prepare all of the necessary journal entries to record the events described above.
- Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming that the net income for the year was $6,500,000.
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