Question

Directions: Make the following journal entries/calculations as required. IF NO JOUNRAL ENTRY IS REQUIRED, WRITE “NO JOURNAL ENTRY REQUIRED” IN THE SPACE BELOW.

On May 1, 2019, X-oft Corporation (a new corporation) issued 100,000 shares of its common stock for $15 per share. The stock had a par value of $2 per share.

Answer to part d (if needed)

d)Oct 30 2019	Cash dividend /Retained earning	22500
	dividend payable (90000*.25)		22500

#number of shares outstanding on date of declaration : 100000-10000 repurchased =90000

e) On November 30, 2019, the accountants for X-oft Corporation determined who owned the stock for the declared dividend of $.25 per share from October 30 above. What is the journal entry (if any) to record this event?

f)  On November 30, 2019, the accountants for X-oft Corporation determined who owned the stock for the declared dividend of $.25 per share from October 30 above. What is the journal entry (if any) to record this event?

g) Assume that the beginning balance in retained earnings in 2019 was $380,000 and 2019 net income was $47,000. Further assume that the transactions above were the only ones to affect owners’ equity. What is the ending balance of retained earnings at the end of 2019?

h) Calculate the following for X-oft Corporation at 12/31/10:

Number of common shares issued:

Number of common shares outstanding:

i) Assume that on January 15,2020, X-oft Corporation sold the 10,000 shares of Treasury Stock for $15/share. What is the journal entry to record this sale?

Answer 1

		X-oft Corporation
		General Journal
	Sr. No.	Date	Account details	Debit	Credit
		5/1/2019	Cash	$ 1,500,000.00
			Common stock		$      200,000.00
			Additional Paid in capital		$ 1,300,000.00
			(Issue of 100000 shares @ $15/- having par value $2/-)
	d	10/30/2019	Dividend	$        22,500.00
			Dividend payable (under current liability)		$        22,500.00
			(Dividend payable on 90000 shares @$0.25 per share)
	e	11/30/2019	No journal entry required
	f	11/30/2019	Dividend payable (under current liability)	$        22,500.00		*
			Cash		$        22,500.00
			(Assumed that the dividend is paid to shareholders)
	g	12/31/2019	Retained earnings
			Opening Balance		$      380,000.00
			Add: Profit for the year ended 2019		$        47,000.00
			Less: Dividend paid		$      (22,500.00)	* Assumed to be paid on 30-Nov-2019
			Closing balance		$      404,500.00
	h	12/31/2019	Number of common shares issued		100,000
			Less: Repurchased treasury stock		(10,000)
			Number of common shares outstanding		90,000
	i	1/15/2020	Cash	$      150,000.00
			Treasury Stock		$      150,000.00
			(Sale of treasury stock booked at full value as we are not given the re-purchase price of treasury stock earlier)