In: Accounting
The stockholders' equity section of Night Corporation's balance sheet at January 1 follows:
Common stock, $3 par value, 300,000 shares authorized, 60,000 shares | 180,000 | |
issued, 6,000 shares in treasury | ||
Additional paid-in capital | ||
In excess of par value | 240,000 | |
From treasury stock | 15,000 | 255,000 |
Retained earnings | 174,000 | |
609,000 | ||
Less: Treasury stock (6,000 shares) at cost | 69,000 | |
Total Stockholders’ Equity | 540,000 |
The following transactions affecting stockholders’ equity occurred during the year:
Jan. | 8 | Issued 15,000 shares of previously unissued common stock for $10 cash per share. |
Mar. | 12 | Sold all of the treasury shares for $14 cash per share. |
June | 30 | Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $12 per share. |
July | 10 | Issued the stock dividend declared on June 30. |
Oct. | 7 | Acquired 2,500 shares of common stock as treasury stock at $13 cash per share. |
Dec. | 18 | Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31. |
Required
a. Prepare journal entries to record the foregoing
transactions.
b. Prepare a statement of stockholders equity. Net income for
the year is $170,500.
Use negative signs with your answers when appropriate (reduction to
retained earnings, acquired treasury stock and treasury stock
balances).