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The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as...

  1. The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as follows:

Stockholders' Equity

Common stock, no par value; authorized, 20,000,000 shares;

Issued and outstanding, 4,000,000 shares                                      $32,000,000

Retained earnings                                                                              55,000,000

                                                                                                                 $87,000,000

The following events occurred during 2020:

Jan. 15 45,000 shares of authorized and unissued common stock sold for $8 per share.

           Jan. 26 Declared a cash dividend of 12 cents per share, payable February 25 to stock-holders of record on February 15.

           Feb. 19 40,000 shares of authorized and unissued common stock sold for $12 per share.

May 1 Declared a 30% stock dividend, distributable to shareholders of record May 15 and distributable June 1. Market value per share is currently $15.

August 1 A three-for-two split was carried out. Market value on July 31 was $18 per share.

Oct. 1 Declared a 20 cents per share cash dividend, payable November 1 to stockholders of record on October 15.

REQUIRED: Prepare all of the journal entries, including any necessary closing entries needed for the above events for the year. If no entry is needed, state “No Entry” and explain why.

Use the information in Problem 1, and assume that pats Corporation has net income of $7,500,000 during the year

REQUIRED: Construct in good form, the stockholders’ equity section of the balance sheet as of December 31, 2020.

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ekkarill92 answered 1 year ago
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