Alexander Corporation reports the following components of stockholders’ equity on December 31, 2016: Common stock—$25 par...

Alexander Corporation reports the following components of stockholders’ equity on December 31, 2016:

Common stock—$25 par value, 60,000 shares authorized,
36,000 shares issued and outstanding $ 900,000
Paid-in capital in excess of par value, common stock 72,000
Retained earnings 361,000
Total stockholders’ equity $ 1,333,000

In year 2017, the following transactions affected its stockholders’ equity accounts.

Jan. 2 Purchased 3,600 shares of its own stock at $25 cash per share.
Jan. 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record.
Feb. 28 Paid the dividend declared on January 7.
July 9 Sold 1,440 of its treasury shares at $30 cash per share.
Aug. 27 Sold 1,800 of its treasury shares at $20 cash per share.
Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record.
Oct. 22 Paid the dividend declared on September 9.
Dec. 31 Closed the $58,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required:
1. Prepare journal entries to record each of these transactions for 2017.
2. Prepare a statement of retained earnings for the year ended December 31, 2017.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2017.

Complete this question by entering your answers in the tabs below.

Required 1
Required 2
Required 3

Prepare a statement of retained earnings for the year ended December 31, 2017. (Amounts to be deducted should be indicated by a minus sign.)

ALEXANDER CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2017
Retained earnings, December 31, 2016selected answer correct $361,000selected answer correct
Add: Net incomeselected answer correct 58,000selected answer correct
$419,000
Less: Cash dividends declaredselected answer correct 119,880selected answer incorrect
Less: Treasury stock reissuancesselected answer correct 1,800selected answer incorrect
Retained earnings, December 31, 2017selected answer correct $540,680

I need help to solve the less: cash dividends delcared. as you can see I got it wrong and for the less: treasury stock too. please help to solve the problem.

Solutions

Expert Solution

Alexander Corporation
Journal entries
Date	General journal	Debit	Credit
Jan. 2	Treasury Stock	90,000
	Cash		90,000
	(To record Purchased 3,600 shares of its own stock at $25 cash per share.) (3600*25)

Jan. 7	Retained earnings	48,600
	Dividend payable		48,600
	(To record declared a $1.50 per share cash dividend payable on February 28.) ((36000-3600)*1.5)

Feb. 28	Dividend payable	48,600
	Cash		48,600
	(To record Paid the dividend declared on January 7.)

July 9	Cash (1440*30)	43,200
	Retained earnings (1440*(30-25))		7,200
	Treasury Stock (1440*25)		36,000
	(To record Sold 1,440 of its treasury shares at $30 cash per share.)

Aug. 27	Cash (1800*20)	36,000
	Retained earnings (1800*(25-20))	9,000
	Treasury Stock (1800*25)		45,000
	(To record Sold 1,800 of its treasury shares at $20 cash per share.)

Sept. 9	Retained earnings	71,280
	Dividend payable		71,280
	(To record declared a $2 per share cash dividend payable on October 22.) ((36000-3600+1440+1800)*2)

Oct. 22	Dividend payable	71,280
	Cash		71,280
	(To record Paid the dividend declared on September 9.)

Dec. 31	Income summary	58,000
	Retained earnings		58,000
	(To record Closed the $58,000 credit balance (from net income) in the Income Summary account to Retained Earnings.)

Alexander Corporation
Statement of retained earnings
For the year ended December 31, 2017
Retained earnings, December 31, 2016	361,000
Add: Net income	58,000
	419,000
Less: Cash dividends declared (48600+71280)	-119880
Less: Treasury stock reissuances (9000-7200)	-1800
Retained earnings, December 31, 2017	297,320
Please note that Correct retained earnings is 297320, they might be wrong because they Add both value (419000+119880+1800 = 540680)

Alexander Corporation
Stockholders’ equity
On December 31, 2016
Common stock—$25 par value, 60,000 shares authorized
36000 shares outstanding	900000
Paid-in capital in excess of par value, common stock	72,000
Retained earnings	361000
Less: treasury stock ((3600-1440-1800)*25)	-9000
Stockholders’ equity	1324000
*In case three items required presenting in Stockholder's equity then Treasury stock adjusted with common stock.*

ekkarill92 answered 1 year ago

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