Question

Park Company reported the following in the statement of shareholders’ equity at 1/1/18:

Common stock, $5 par value, authorized 200,000 shares,

      issued 100,000                                                                              $   500,000

Additional paid-in capital 1,500,000

Retained earnings 516,000

                                                                                                            $2,516,000

Less:  treasury stock, at cost, 5,000 shares (40,000)

Total shareholders’ equity $2,476,000

The following events occurred in 2018:

       3/1       1,000 shares of treasury stock were sold for $10,000

6/15     A 30% stock dividend was declared when the market value of the stock was $11.  The shares will be distributed on 7/31 to holders of record on 7/1.

       9/9      9,000 of previously unissued common stock sold for $12 per share.

      10/1     A 2-for-1 stock split resulted in the common stock’s par value being halved.

12/15   A cash dividend of $.50 per share was declared.

12/31   Net income for 2018 was $473,500.

Required:  

Prepare the journal entries required for the 2018 events affecting equity.

Prepare the equity section of the balance sheet at 12/31/18.

Show all formulas explaining how you derived to your answer

Answer 1