Question
In: Accounting
At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the...
At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the following:
|
Paid-In Capital |
||
|
Common Stock, $30 par value, authorized 60,000 shares, 15,000 shares issued and outstanding |
$450,000 |
|
|
Paid-In Capital in Excess of Par Value - Common |
80,000 |
|
|
Total Paid-In Capital by Common |
||
|
Stockholders |
$530,000 |
|
|
Retained Earning |
170,000 |
|
|
Total Stockholders’ Equity |
$700,000 |
|
Figure 4
1. Record the transactions in general journal form.
2. Prepare the stockholders’ equity section at year-end using the Blueprint as a guide.
3. Prepare a statement of retained earnings at December 31, 201X. Accounts are provided in the working papers that accompany this text. Be sure to put in the beginning balances.
June 5 Mountain View Corporation purchased 1,000 shares of treasury stock at $34.
June 25 The board of directors voted a $0.20 per share cash dividend payable on July 20 to stockholders of record on July 4.
July 20 Cash dividend declared on June 25 is paid.
Sept. 10 Sold 300 shares of the treasury stock at $43 per share.
Sept. 30 Sold 700 shares of the treasury stock at $33 per share.
Oct. 15 The board of directors declared a 10% stock dividend distributable on January 2 to stockholders of record on November 2. The market value of the stock is currently $50 per share.
Dec. 31 Closed the net income of $70,000 in the Income Summary account to Retained Earnings.
Solutions
Expert Solution
| Answer 1. | ||||
| Journal Entry | ||||
| Date | Particulars | Dr. Amt. | Cr. Amt. | |
| 5-Jun | Treasury Stock | 34,000.00 | 1,000 Shares X $34 | |
| Cash | 34,000.00 | |||
| (Record the purchase of Treasury Stock) | ||||
| 25-Jun | Retained Earnings | 2,800.00 | 14,000 shares X $0.20 | |
| Cash Dividend Payable | 2,800.00 | |||
| (Record the Cash Dividend declared) | ||||
| 20-Jul | Cash Dividend Payable | 2,800.00 | ||
| Cash | 2,800.00 | |||
| (record the dividend paid) | ||||
| 10-Sep | Cash | 12,900.00 | 300 Shares X $43 | |
| Treasury Stock | 10,200.00 | 300 Shares X $34 | ||
| Paid-In Capital in Excess of Par Value - Treasury | 2,700.00 | 300 Shares X ($43-$34) | ||
| (Record the sale of treasury stock) | ||||
| 30-Sep | Cash | 23,100.00 | 700 Shares X $33 | |
| Paid-In Capital in Excess of Par Value - Treasury | 700.00 | 700 Shares X $1 | ||
| Treasury Stock | 23,800.00 | 700 Shares X $34 | ||
| (Record the sale of treasury stock) | ||||
| 15-Oct | Retained Earnings | 75,000.00 | 15,000 Shares X 10% X $50 | |
| Common Stock Dividend Distributable | 45,000.00 | 15,000 Shares X 10% X $30 | ||
| Paid-in Capital in Excess of Par-Common Stock | 30,000.00 | 15,000 Shares X 10% X $20 | ||
| (record the stock dividend declared) | ||||
| 31-Dec | Income Summary | 70,000.00 | ||
| Retained Earnings | 70,000.00 | |||
| (To Close Net Income) | ||||
| Answer 3 | ||
| MOUNTAIN VIEW CORPORATION | ||
| Retained Earning Statement | ||
| For the Year Ended Dec 31, 201X | ||
| Balance, Jan 1, as Reported | 170,000.00 | |
| Add: Net Income / (Loss) | 70,000.00 | |
| Less: | ||
| Stock Dividends - Common | 75,000.00 | |
| Cash Dividends - Common | 2,800.00 | 77,800.00 |
| Balance, Dec-31 | 162,200.00 | |
| Answer 2. | ||
| MOUNTAIN VIEW CORPORATION | ||
| Balance Sheet (Partial) | ||
| For the Year Ended Dec 31, 201X | ||
| Stockholders' Equity | ||
| Paid-in Capital | ||
| Capital Stock | ||
| Common Stock - $30 Par Value, Authorized 60,000 Shares, 15000 Shares Issued & Outstanding | 450,000.00 | |
| Common Stock Dividends Distributable | 45,000.00 | 495,000.00 |
| Total Capital Stock | 495,000.00 | |
| Additional Paid-in Capital | ||
| Paid-in Capital in Excess of Par-Common Stock | 80,000.00 | |
| Paid-in Capital in Excess of Par-Treasury Stock | 2,000.00 | |
| Total Additional Paid-in Capital | 82,000.00 | |
| Total Paid-in Capital | 577,000.00 | |
| Retained Earnings | 162,200.00 | |
| Total Stockholders' Equity | 739,200.00 | |
ekkarill92 answered 2 years agoRelated Solutions
At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the...
At the beginning of January 201X, the stockholders’ equity of
Mountain View Corporation consisted of the following:
Paid-In Capital:
Common Stock, $30 par value, authorized 60,000 shares,
15,000 shares issued and outstanding
$450,000
Paid-In Capital in Excess of Par Value-Common
80,000
Paid-In Capital by Common
Stockholders
$530,000
Retained Earnings
170,000
Total Stockholders’ Equity
$700,000
Figure 8
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