Question

In its published SEC 10-K Balance Sheet for the FY 2015, Alpha Company, had the following balances (all balances are normal): Accounts Amount Preferred Stock, ($100 par value, 5% noncumulative, 50,000 shares authorized, 8,000 shares issued and outstanding) $800,000 Common Stock ($10 par value, 200,000 shares authorized, 120,000 shares issued and outstanding) $1,200,000 Paid-in Capital in Excess of par, Common 150,000 Retained Earnings 700,000 The following are related events that occurred during 2016: January 2, Alpha declared a 10% stock dividend on its common stock when Alpha's common stock was trading for $15 per share on that day. Stock dividends were distributed on January 31 to shareholders as of January 25. February 29, Alpha reacquired 1,000 shares of common stock for $22 each. March 31, Alpha reissued 350 shares of treasury stock for $25 each July 1, Alpha reissued 400 shares of treasury stock for $19 each. October 1, Alpha declared full year cash dividends for preferred stock and $1.50 cash dividends for outstanding shares and paid shareholders on October 15. December 1, issued 10,000 shares of common stock for equipment with a sticker price of $210,000. Alpha's common stock was trading at $20 per share that day. Net Income for 2016 was $250,000 Use this information to prepare General Journal entries, without explanations, for the 2016 noted transactions.

Answer 1

Alpha Company
Journal entries
Date	Account title	Debit	Credit
January 2	Retained earnings (12000*15)	180000
	Common stock dividend Distributable (12000*10)		120000
	Paid in additional capital (12000*(15-10))		60000
	Stock dividend = 120000*10% = 12000
January 31	Common stock dividend Distributable (12000*10)	120000
	Common stock		120000
February 29	Treasury stock (1000*22)	22000
	Cash		22000
March 31	Cash (350*25)	8750
	Treasury stock (350*22)		7700
	Paid in capital from treasury stock (350*(25-22))		1050
July 1	Cash (400*19)	7600
	Paid in capital from treasury stock (400*(22-19))	1200
	Treasury stock (400*22)		8800
October 1	Retained earning	12000
	Dividend payable - preferred stock (8000*1.50)		12000
October 15	Dividend payable - preferred stock (8000*1.50)	12000
	Cash		12000
December 1	Equipment (10000*20)	200000
	Common stock (10000*10)		100000
	Additional paid in capital (10000*(20-10))		100000
	Sticker price is irrelevant. What we paid for equipment is relevant.
December 31	Income summary	250000
	Retained earning		250000