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Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...
Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity accounts, with balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (600,000 shares authorized, 400,000 shares issued)$4,000,000
Paid-In Capital in Excess of Stated Value-Common Stock750,000
Retained Earnings9,080,000
Treasury Stock (40,000 shares, at cost)600,000
The following selected transactions occurred during the year:
Jan. 15.Paid cash dividends of $0.14 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $50,400.
Mar. 15.Sold all of the treasury stock for $18 per share.
Apr. 13.Issued 75,000 shares of common stock for $1,350,000.
June 14.Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.
July 16.Issued shares of stock for the stock dividend declared on June 14.
Oct. 30.Purchased 25,000 shares of treasury stock for $20 per share.
Dec. 30.Declared a $0.17-per-share dividend on common stock.
31.Closed the two dividends accounts to Retained Earnings.
Required:
1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place.
Common Stock
Jan. 1 Bal.4,000,000
Apr. 13
July 16
Dec. 31 Bal.
Paid-In Capital in Excess of Stated Value-Common Stock
Jan. 1 Bal.750,000
Apr. 13
June 14
Dec. 31 Bal.
Retained Earnings
Dec. 31 Jan. 1 Bal.9,080,000
Dec. 31 Bal.
Treasury Stock
Jan. 1 Bal.600,000Mar. 15
Oct. 30
Dec. 31 Bal.
Paid-In Capital from Sale of Treasury Stock
Mar. 15
Stock Dividends Distributable
July 16 June 14
Stock Dividends
June 14 Dec. 31
Cash Dividends
Dec. 30 Dec. 31
2. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.
Jan. 15. Paid cash dividends of $0.14 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $50,400.
DateAccountDebitCredit
Jan. 15Cash Dividends Payable
Cash
Mar. 15. Sold all of the treasury stock for $18 per share.
DateAccountDebitCredit
Mar. 15Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock
Apr. 13. Issued 75,000 shares of common stock for $1,350,000
DateAccountDebitCredit
Apr. 13Cash
Common Stock
Paid-In Capital from Sale of Treasury Stock
June 14. Declared a 4% on common stock, to be capitalized at the market price of the stock, which is $20 per share.
DateAccountDebitCredit
June 14Stock Dividends Distributable
Stock Dividends Distributable
Paid-In Capital in Excess of Stated Value-Common Stock
July 16. Issued stock for stock dividend declared on June 14.
DateAccountDebitCredit
July 16Stock Dividends Distributable
Common Stock
Oct. 30. Purchased 25,000 shares of treasury stock for $20 per share.
DateAccountDebitCredit
Oct. 30Treasury Stock
Cash
Dec. 30. Declared a $0.17-per-share dividend on common stock.
DateAccountDebitCredit
Dec. 30Cash Dividends
Cash Dividends Payable
Dec. 31. Closed the two dividends accounts to Retained Earnings.
DateAccountDebitCredit
Dec. 31Retained Earnings
Stock Dividends
Cash Dividends
3. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y1. Assume that net income was $9,443,000 for the year ended December 31, 20Y1. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank or enter “0”.
Nav-Go Enterprises Inc.
Statement of Stockholders’ Equity
For the Year Ended December 31, 20Y1
Common StockPaid-In
Capital in
Excess of
Stated ValuePaid-In
Capital from Sale of
Treasury StockRetained
EarningsTreasury
StockTotal
Balances, January 1 $$$$$$
Issued Common Stock
Net Income
Cash Dividends
Stock Dividends
$$$$$$
4. Prepare the “Stockholders’ Equity” section of the December 31, 20Y1, balance sheet. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Nav-Go Enterprises Inc.
Balance Sheet
December 31, 20Y1
Stockholders' Equity
Paid-In Capital:
Common Stock, $10 Stated Value (600,000 Shares Authorized, 494,000 Shares Issued)
Excess of Issue Price Over Stated Value
From Sale of Treasury Stock
Total Paid-In Capital
Retained Earnings
Total
Treasury Stock (25,000 Shares, at Cost)
Total Stockholders' Equity
Feedback
1. Remember that the numbers from the T accounts will used to prepare the statement of stockholders' equity and the balance sheet. As you post the journal entries it is important to work carefully. Check your work to insure that you have posted the correct numbers to the appropriate side of the T account. Also, make sure that your account totals are correct.
2. The purchase of treasury stock is typically recorded using the cost method. When the company resells shares of treasury stock pay attention to the price these shares are being sold for and the price originally paid to reacquire these shares. On the date of declaration of a cash dividend, the corporation is legally obligated to pay that dividend. When the company declares a cash or stock dividend keep in mind the previous stock transactions that have occurred; would these transactions have any affect on the amount of the cash dividend?
3. Review the example of the statement of stockholders' equity in the chapter. Pay particular attention to the treatment of dividends, and the purchase and sale of treasury stock. Recall that the statement of stockholders' equity shows the beginning balances of common stock and retained earnings. The common stock balance will be increased by any stock issued during the period and retained earnings will be increased by any net income, and decreased by any net losses and dividends.
4. A stockholders' equity section of the balance sheet is made up of separately reported paid-in capital, retained earnings, and treasury stock. Recall that paid-in capital includes separate reporting of each class of stock. Treasury stock held by a corporation reduces stockholders' equity.
Solutions
Expert Solution
| 2 | Journal entries | ||||||||
| Date | General Journal | Debit | Credit | ||||||
| Jan 15. | Dividend payable | 50400 | |||||||
| Cash | 50400 | ||||||||
| (Cash dividend paid) | |||||||||
| Mar 15. | Cash | (40000*18) | 720000 | ||||||
| Paid-in-capital from sale of treasury stock | (Plug) | 120000 | |||||||
| Treasury stock | 600000 | ||||||||
| (Treasury stock reissued) | |||||||||
| Apr 13. | Cash | 1350000 | |||||||
| Paid-in capital in excess of stated value-common stock (plug) | 600000 | ||||||||
| Common stock | (75000*10) | 750000 | |||||||
| (Issued common stock for cash) | |||||||||
| June 14. | Stock dividend | (Note:1) | 380000 | ||||||
| Paid-in capital in excess of stated value-common stock | 190000 | ||||||||
| Stock dividends distributable | 190000 | ||||||||
| (Stock dividend declared) | |||||||||
| July 16. | Stock dividends distributable | (Note:1) | 190000 | ||||||
| Common stock | 190000 | ||||||||
| (Stock dividend distributed) | |||||||||
| Oct 30. | Treasury stock | (25000*20) | 500000 | ||||||
| Cash | 500000 | ||||||||
| (Purchased treasury stock for cash) | |||||||||
| Dec 30. | Cash dividends | (Note:2) | 76500 | ||||||
| Dividend payable | 76500 | ||||||||
| (Cash dividend declared) | |||||||||
| Dec 31. | Retained earnings | 456500 | |||||||
| Stock dividends | 380000 | ||||||||
| Cash dividends | 76500 | ||||||||
| (Closed two divdend accounts) | |||||||||
| Note:1 | |||||||||
| Stock dividend is available on shares outstanding: | |||||||||
| $ | $ | ||||||||
| Shares outstanding as on Jan 1 | |||||||||
| (400000-40000) | 360000 | ||||||||
| Add: |
 ekkarill92 answered 2 years agoRelated SolutionsEntries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (600,000 shares authorized,
400,000 shares issued)$4,000,000
Paid-In Capital in Excess of Stated Value-Common
Stock750,000
Retained Earnings9,080,000
Treasury Stock (40,000 shares, at cost)600,000
The following selected transactions occurred during the
year:
Jan. 15.Paid cash dividends of $0.14 per share on the common
stock. The dividend had been properly recorded when...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (600,000 shares authorized,
400,000 shares issued)$4,000,000
Paid-In Capital in Excess of Stated Value-Common
Stock750,000
Retained Earnings9,080,000
Treasury Stock (40,000 shares, at cost)600,000
The following selected transactions occurred during the
year:
Jan. 15.Paid cash dividends of $0.14 per share on the common
stock. The dividend had been properly recorded when...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders' equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders' equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $5 stated value (900,000 shares authorized,
620,000 shares issued)
$3,100,000
Paid-In Capital in Excess of Stated Value—Common Stock
1,240,000
Retained Earnings
4,875,000
Treasury Stock (48,000 shares, at cost)
288,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.06 per share on the common stock. The
dividend...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders' equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders' equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $5 stated value (900,000 shares authorized,
620,000 shares issued)
$3,100,000
Paid-In Capital in Excess of Stated Value—Common Stock
1,240,000
Retained Earnings
4,875,000
Treasury Stock (48,000 shares, at cost)
288,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.06 per share on the common stock. The
dividend...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (800,000 shares authorized,
520,000 shares issued)
$5,200,000
Paid-In Capital in Excess of Stated Value-Common Stock
1,000,000
Retained Earnings
11,800,000
Treasury Stock (52,000 shares, at cost)
728,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.13 per share on the common stock. The
dividend...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (700,000 shares authorized,
480,000 shares issued)
$4,800,000
Paid-In Capital in Excess of Stated Value-Common Stock
900,000
Retained Earnings
10,900,000
Treasury Stock (48,000 shares, at cost)
672,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.14 per share on the common stock. The
dividend...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (850,000 shares authorized,
560,000 shares issued)
$5,600,000
Paid-In Capital in Excess of Stated Value-Common Stock
1,050,000
Retained Earnings
12,710,000
Treasury Stock (56,000 shares, at cost)
784,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.15 per share on the common stock. The
dividend...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (600,000 shares authorized,
400,000 shares issued)$4,000,000
Paid-In Capital in Excess of Stated Value-Common
Stock750,000
Retained Earnings9,080,000
Treasury Stock (40,000 shares, at cost)600,000
The following selected transactions occurred during the
year:
Jan. 15.Paid cash dividends of $0.14 per share on the common
stock. The dividend had been properly recorded when...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (600,000 shares authorized,
400,000 shares issued)$4,000,000
Paid-In Capital in Excess of Stated Value-Common
Stock750,000
Retained Earnings9,080,000
Treasury Stock (40,000 shares, at cost)600,000
The following selected transactions occurred during the
year:
Jan. 15.Paid cash dividends of $0.14 per share on the common
stock. The dividend had been properly recorded when...
Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...Entries for Selected Corporate Transactions
Nav-Go Enterprises Inc. produces aeronautical navigation
equipment. Nav-Go Enterprises' stockholders’ equity accounts, with
balances on January 1, 20Y1, are as follows:
Common Stock, $10 stated value (350,000 shares authorized,
240,000 shares issued)
$2,400,000
Paid-In Capital in Excess of Stated Value-Common Stock
450,000
Retained Earnings
5,450,000
Treasury Stock (24,000 shares, at cost)
336,000
The following selected transactions occurred during the
year:
Jan. 15.
Paid cash dividends of $0.12 per share on the common stock. The
dividend...
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