Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $550,000 Paid-in capital in...


Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding	$550,000
Paid-in capital in excess of par value, common stock	60,000
Retained earnings	460,000
Total stockholders' equity	$1,070,000

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

Jan.	1	Purchased 4,500 shares of its own stock at $20 cash per share.
Jan.	5	Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb.	28	Paid the dividend declared on January 5.
July	6	Sold 1,688 of its treasury shares at $24 cash per share.
Aug.	22	Sold 2,812 of its treasury shares at $17 cash per share.
Sept.	5	Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct.	28	Paid the dividend declared on September 5.
Dec.	31	Closed the $408,000 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.

Solutions

Expert Solution

1
Date	General Journal	Debit	Credit
1-Jan	Treasury stock, Common	90,000		=4500*20
	Cash		90,000

5-Jan	Retained earnings	202,000		=(55000-4500)*4
	Common dividend payable		202,000

28-Feb	Common dividend payable	202,000
	Cash		202,000

6-Jul	Cash	40,512		=1688*24
	Treasury stock, Common		33,760	=1688*20
	Paid-in capital, Treasury stock		6,752

22-Aug	Cash	47,804		=2812*17
	Paid-in capital, Treasury stock	6,752
	Retained earnings	1,684
	Treasury stock, Common		56,240	=2812*20

5-Sep	Retained earnings	220,000		=55000*4
	Common dividend payable		220,000

28-Oct	Common dividend payable	220,000
	Cash		220,000

31-Dec	Income summary	408,000
	Retained earnings		408,000

2
	Statement of Retained Earnings
	For Year Ended December 31, 2017
	Retained earnings, Dec. 31, 2016	460,000
	Add: Net income	408,000
		868,000
	Less: Cash dividends declared	-422,000
	Less: Treasury stock reissuances	-1,684
	Retained earnings, Dec. 31, 2017	444,316

3
	Stockholders' Equity Section of the Balance Sheet
	December 31, 2017
	Common stock - $10 par value	550,000
	Paid-in capital in excess of par value, common stock	60,000
	Total contributed capital	610,000
	Retained earnings	444,316
	Total stockholders' equity	1,054,316

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $1,100,000 Paid-in capital in...

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $1,100,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 430,000 Total stockholders' equity $1,600,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 4,500 shares of its own stock at $25 cash per share. Jan. 5 Directors declared a $6 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the...

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 1,100,000 Paid-in capital...

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 1,100,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 460,000 Total stockholders' equity $ 1,620,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,500 shares of its own stock at $25 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28...

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 1,100,000 Paid-in capital...

Common stock—$20 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 1,100,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 400,000 Total stockholders' equity $ 1,570,000 In year 2017, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28...

create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $...

create journal entries: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 460,000 Total stockholders’ equity $ 1,090,000 In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of...

Prepare statement of retained earnings: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and...

Prepare statement of retained earnings: Common stock—$10 par value, 100,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Paid-in capital in excess of par value, common stock 80,000 Retained earnings 460,000 Total stockholders’ equity $ 1,090,000 In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5...

Stockholders' Equity Paid-In Capital: Common Stock—$5 Par Value; 1,300 shares authorized, 310 shares issued and outstanding...

Stockholders' Equity Paid-In Capital: Common Stock—$5 Par Value; 1,300 shares authorized, 310 shares issued and outstanding $1,550 Paid-In Capital in Excess of Par—Common 4,650 Total Paid-In Capital 6,200 Retained Earnings 59,000 Total Stockholders' Equity $65,200 DATA TABLE ABOVE Western Amusements Corporation had the following? stockholders' equity on November 30?: On December? 30, Western purchased 100 shares of treasury stock at $ 14 per share. Requirement 1. Journalize the purchase of the treasury stock.? (Record debits? first, then credits. Select the...

Preferred 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued) $3,980,000 Paid-In Capital in Excess...

Preferred 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued) $3,980,000 Paid-In Capital in Excess of Par—Preferred Stock 159,200 Common Stock, $3 par (5,000,000 shares authorized, 1,870,000 shares issued) 5,610,000 Paid-In Capital in Excess of Par—Common Stock 1,215,500 Retained Earnings 31,497,000 During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows: Jan. 5 Issued 532,900 shares of common stock at $9, receiving cash. Feb. 10 Issued 11,000 shares of preferred...

Preferred Stock- 5% $11 Par Value 5,500 shares authorized 4,000 shares issued and outstanding Common Stock...

Preferred Stock- 5% $11 Par Value 5,500 shares authorized 4,000 shares issued and outstanding Common Stock - $.20 Par Value 2,000,000 shares authorized, 1,650,000 shares issued and outstanding Requirement 1. Sapphire declares cash dividends of $28,000 for 2018. How much of the dividends goes to preferred? stockholders? How much goes to common? stockholders? ?(Complete all input boxes. Enter? "0" for any zero? amounts.) Sapphire dividend would be divided between preferred and common stockholders in this? manner: Total Dividend Dividend to...

ABC Company is authorized to issue 100,000 shares of its $10 par value common stock and...

ABC Company is authorized to issue 100,000 shares of its $10 par value common stock and as of February 1 had 25,000 shares issued and outstanding. On March 1, ABC bought 1,000 of its shares for the treasury at $25 each. Required—Prepare the journal entries that ABC should have made to record the transactions described in each of the following independent scenarios: Scenario #1 (1) On March 11, ABC issued 100 of the treasury shares at $30 each. (2) On...

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9...

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9 per share. Subsequently, the company declared and issued a 10% stock dividend. The market price of the shares is $20 per share. 53. What is the effect of the dividend on Paid in Capital? a. Paid-in Capital decreased b. Paid-in Capital increased c. Paid-in Capital remained the same d. None of the above 54. Refer to the previous question. By what amount did Paid...

Subjects