In: Accounting
Alexander Corporation reports the following components of
stockholders’ equity on December 31, 2016:
Common stock—$25 par
value, 50,000 shares authorized, 31,000 shares issued and outstanding |
$ | 775,000 | |
Paid-in capital in excess of par value, common stock | 62,000 | ||
Retained earnings | 343,000 | ||
Total stockholders’ equity | $ | 1,180,000 | |
In year 2017, the following transactions affected its stockholders’
equity accounts.
Jan. | 2 | Purchased 3,100 shares of its own stock at $25 cash per share. | ||
Jan. | 7 | Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record. | ||
Feb. | 28 | Paid the dividend declared on January 7. | ||
July | 9 | Sold 1,240 of its treasury shares at $30 cash per share. | ||
Aug. | 27 | Sold 1,550 of its treasury shares at $20 cash per share. | ||
Sept. | 9 | Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. | ||
Oct. | 22 | Paid the dividend declared on September 9. | ||
Dec. | 31 | Closed the $53,000 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.