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, |
$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
Tasks:
a. Record the transactions in general journal form.
b. Prepare the stockholders’ equity section at year-end using the Blueprint as a guide.
c. 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.
201X
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 a. | ||||
| Journal Entry | ||||
| Date | Particulars | Dr. Amt. | Cr. Amt. | |
| 201X | ||||
| 5-Jun | Treasury Shares | 34,000.00 | 1,000 Shares X $34 | |
| Cash | 34,000.00 | 1,000 Shares X $34 | ||
| (Record the purchase of treasury shares) | ||||
| 25-Jun | Retained Earnings | 2,800.00 | 14,000 Shares X $0.20 | |
| Cash Dividend | 2,800.00 | 14,000 Shares X $0.20 | ||
| (Record the cash dividend declared) | ||||
| 20-Jul | Cash Dividend | 2,800.00 | ||
| Cash | 2,800.00 | |||
| (record the dividend paid) | ||||
| 10-Sep | Cash | 12,900.00 | 300 Shares X $43 | |
| Treasury Shares | 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 sales of treasury shares) | ||||
| 30-Sep | Cash | 23,100.00 | 700 Shares X $33 | |
| Paid in Capital in Excess of Par Value - Treasury | 700.00 | 700 Shares X ($34 - $33) | ||
| Treasury Shares | 23,800.00 | 700 Shares X $34 | ||
| (Record the sale of treasury shares) | ||||
| 15-Oct | Retained Earnings | 75,000.00 | 15,000 Shares X 10% X $50 | |
| Stock Dividend Distributable | 45,000.00 | 15,000 Shares X 10% X $30 | ||
| Paid in Capital in Excess of Par Value - Common | 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 | |||
| (record the net income earned) | ||||
| Answer b. | ||
| Mountain View Corporation | ||
| Balance Sheet | ||
| As on Dec 31, 201X | ||
| Stockholders' Equity | ||
| Paid in Capital | ||
| Common Stock - $30 Par Value, Authorized 60,000 Shares, 15,000 shares issued & outstanding | 450,000.00 | |
| Paid in Capital in Excess of Par Value - Common | 110,000.00 | |
| Paid in Capital in Excess of Par Value - Treasury | 2,000.00 | |
| Total Paid in Capital | 562,000.00 | |
| Retained Earnings | 162,200.00 | |
| Total Stockholders' Equity | 724,200.00 | |
| Answer c. | ||
| Mountain View Corporation | ||
| Statement of Retained Earnings | ||
| For the Year Ended Dec 31, 201X | ||
| Beginning Balance - Jan 1, 201X | 170,000.00 | |
| Add: Net Income | 70,000.00 | |
| Sub-total | 240,000.00 | |
| Cash Dividend | (2,800.00) | |
| Stock Dividend Distributable | (75,000.00) | |
| Ending Balance - Dec 31, 201X | 162,200.00 | |
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
Total Paid-In Capital by Common
Stockholders
$530,000
Retained Earning
170,000
Total Stockholders’ Equity
$700,000
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