In: Accounting
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.
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. |