Question

1. PR.12.04B
2. PR.12.05B

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   Entries for Selected Corporate Transactions

   Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders' equity accounts, with balances on January 1, 20Y1, are as follows:

   Common Stock, $5 stated value (900,000 shares authorized, 620,000 shares issued)	$3,100,000
   Paid-In Capital in Excess of Stated Value—Common Stock	1,240,000
   Retained Earnings	4,875,000
   Treasury Stock (48,000 shares, at cost)	288,000

   The following selected transactions occurred during the year:

   Jan. 15.	Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $34,320.
   Mar. 15.	Sold all of the treasury stock for $6.75 per share.
   Apr. 13.	Issued 200,000 shares of common stock for $8 per share.
   June 14.	Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $7.50 per share.
   July 16.	Issued stock for stock dividend declared on June 14.
   Oct. 30.	Purchased 50,000 shares of treasury stock for $6 per share.
   Dec. 30.	Declared an $0.08-per-share dividend on common stock.
   31.	Closed the two dividends accounts to Retained Earnings.

   Required:

Prepare a statement of stockholders’ equity for the year ended December 31, 20Y1. Assume that net income was $775,000 for the year ended December 31, 20Y1. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank or enter “0”.

Nav-Go Enterprises Inc. Statement of Stockholders’ Equity For the Year Ended December 31, 20Y1
	Common Stock	Paid-In Capital in Excess of Stated Value	Paid-In Capital from Sale of Treasury Stock	Retained Earnings	Treasury Stock	Total
	$	$	$	$	$	$
	$	$	$	$	$	$

4. Prepare the "Stockholders’ Equity" section of the December 31, 20Y1, balance sheet. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Nav-Go Enterprises Inc. Balance Sheet December 31, 20Y1
Stockholders' Equity
Paid-In Capital:
	$
Total Paid-In Capital		$
Total		$
Total Stockholders' Equity		$

Answer 1

Answer :

1. and 2.

2.

20Y1
Jan.	15	Cash Dividends Payable	34,320
		Cash [(620,000 – 48,000 x $0.06]		34,320
Mar.	15	Cash (48,000 x $6.75)	324,000
		Treasury Stock (48,000 x $6.00)		288,000
		Paid-In Capital from Sale of Treasury Stock
		[48,000 x ($6.75 – $6.00)]		36,000
Apr.	13	Cash (200,000 x $8)	1,600,000
		Common Stock (200,000 x $5)		1,000,000
		Paid-In Capital in Excess of Stated Value—
		Common Stock [200,000 x ($8 – $5)]		600,000
June	14	Stock Dividends [(620,000 + 200,000) x 3% x $7.50]	184,500
		Stock Dividends Distributable (24,600 x $5)		123,000
		Paid-In Capital in Excess of Stated Value—
		Common Stock [24,600 x ($7.50 – $5.00)]		61,500
July	16	Stock Dividends Distributable	123,000
		Common Stock		123,000
Oct.	30	Treasury Stock (50,000 x $6)	300,000
		Cash		300,000
Dec.	30	Cash Dividends	63,568
		Cash Dividends Payable		63,568
		[(620,000 + 200,000 + 24,600 – 50,000) x $0.08].
	31	Retained Earnings	248,068
		Stock Dividends		184,500
		Cash Dividends		63,568

3.

Nav-Go Enterprises Inc. Statement of Stockholders’ Equity For the Year Ended December 31, 20Y1
	Common Stock	Paid-In Capital in Excess of Stated Value	Paid-In Capital from Sale of Treasury Stock	Retained Earnings	Treasury Stock	Total
Balances, January 1	$3,100,000	$1,240,000	$ 0	$4,875,000	$(288,000)	$ 8,927,000
Issued common stock	1,000,000	600,000				1,600,000
Net income				775,000		775,000
Cash dividends				(63,568)		(63,568)
Stock dividend	123,000	61,500		(184,500)		0
Sale of treasury stock			36,000		288,000	324,000
Purchase of treasury
stock					(300,000)	(300,000)
Balances, December 31	$4,223,000	$1,901,500	$36,000	$5,401,932	$(300,000)	$11,262,432

4.

Stockholders’ Equity
Paid-in capital:
Common stock, $5 stated value (900,000 shares
authorized, 844,600 shares issued)	$4,223,000
Excess of issue price over stated value	1,901,500
From sale of treasury stock	36,000
Total paid-in capital		$ 6,160,500
Retained earnings		5,401,932
Total		$11,562,432
Treasury stock (50,000 shares at cost)		(300,000)
Total stockholders’ equity		$11,262,432