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create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $...

create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 460,000 Total stockholders’ equity $ 1,090,000 In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 1,875 of its treasury shares at $24 cash per share. Aug. 22 Sold 3,125 of its treasury shares at $17 cash per share. Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

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Expert Solution

Date

General Journal

Debit

Credit

1-Jan

Treasury stock, Common (5000x20)

100000

Cash

100000

(To record the purchase of own stock)

5-Jan

Retained earnings (55000-5000)*4

200000

Common dividend payable

200000

(To record the declaration of dividend)

28-Feb

Common dividend payable

200000

Cash

200000

(To record the payment of dividend)

6-Jul

Cash (1875*24)

45000

Treasury stock, Common (1875*20)

37500

Paid-In capital, Treasury stock (1875*4)

7500

(To record the sale of treasury stock)

22-Aug

Cash (3125*17)

53125

Paid-In capital, Treasury stock

7500

Retained earnings

1875

Treasury stock, Common ((3125*20)

62500

(To record the sale of treasury stock)

5-Sep

Retained earnings

220000

Common dividend payable (55000*4)

220000

(To record the declaration of dividend)

28-Oct

Common dividend payable

220000

Cash

220000

(To record the payment of dividend)

31-Dec

Income summary

408000

Retained earnings

408000

(To close Income Summary account to
Retained Earnings.)

ekkarill92 answered 2 years ago
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