Question
Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $10 par value, 300,000 shares
Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows:
Common stock, $10 par value, 300,000 shares authorized, 60,000 shares | 600,000 | |
issued, 6,000 shares in treasury | ||
Additional paid-in capital | ||
In excess of par value | 960,000 | |
From treasury stock | 60,000 | 1,020,000 |
Retained earnings | 696,000 | |
2,316,000 | ||
Less: Treasury stock (6,000 shares) at cost | 276,000 | |
Total Stockholders Equity | 2,040,000 |
The following transactions affecting stockholders equity occurred during the year:
Jan. | 8 | Issued 15,000 shares of previously unissued common stock for $42 cash per share. |
Mar. | 12 | Sold all of the treasury shares for $56 cash per share. |
June | 30 | Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $50 per share. |
July | 10 | Issued the stock dividend declared on June 30. |
Oct. | 7 | Acquired 2,500 shares of common stock as treasury stock at $52 cash per share. |
Dec. | 18 | Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31. |
Required a. Prepare journal entries to record the foregoing transactions. b. Prepare a statement of stockholders equity. Net income for the year is $682,000.
- Journal Entries
- Statement of Stockholders' Equity
General Journal | |||
---|---|---|---|
Date | Description | Debit | Credit |
Jan.8 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Paid-in-Capital in Excess of Par Value | Answer | Answer | |
Issued shares of common stock. | |||
Mar.12 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Paid-in-Capital from Treasury Stock | Answer | Answer | |
Sold shares of treasury stock. | |||
Jun.30 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Paid-in-Capital in Excess of Par Value | Answer | Answer | |
Declared stock dividend. | |||
Jul.10 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Issued shares of common stock declared as dividend. | |||
Oct.7 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Purchased shares of common stock for treasury. | |||
Dec.18 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
Declared cash dividend. | |||
Dec.31 | Answer |
Answer | Answer |
Answer |
Answer | Answer | ||
To close the income summary account. | |||
Dec.31 | Answer |
Answer | Answer | ||
Stock dividends | Answer | Answer | |
Answer |
Answer | Answer | ||
To close the dividend accounts. |
Note: Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances).
Night Corporation Statement of Stockholders' Equity For Year Ended December 31 | |||||||
---|---|---|---|---|---|---|---|
Common Stock | Paid-in-Capital in Excess of Par | Paid-in-Capital from Treasury Stock | Retained Earnings | Treasury Stock | Total | ||
Balance, January 1 | Answer | Answer | Answer | Answer | Answer | Answer | |
Answer | Common shares issued | Answer | Answer | Answer | Answer | Answer | Answer |
Answer | Treasury shares sold | Answer | Answer | Answer | Answer | Answer | Answer |
Stock Dividends Issued | Answer | Answer | Answer | Answer | Answer | Answer | |
Answer | Treasury shares acquired | Answer | Answer | Answer | Answer | Answer | Answer |
Cash Dividends Declared | Answer | Answer | Answer | Answer | Answer | Answer | |
Net Income | Answer | Answer | Answer | Answer | Answer | Answer | |
Balance, December 31 | Answer | Answer | Answer | Answer | Answer | Answer |
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