Question

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, $10 stated value (350,000 shares authorized, 240,000 shares issued)	$2,400,000
Paid-In Capital in Excess of Stated Value-Common Stock	450,000
Retained Earnings	5,450,000
Treasury Stock (24,000 shares, at cost)	336,000

The following selected transactions occurred during the year:

Jan. 15.	Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $25,920.
Mar. 15.	Sold all of the treasury stock for $17 per share.
Apr. 13.	Issued 45,000 shares of common stock for $720,000.
June 14.	Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share.
July 16.	Issued shares of stock for the stock dividend declared on June 14.
Oct. 30.	Purchased 15,000 shares of treasury stock for $19 per share.
Dec. 30.	Declared a $0.15-per-share dividend on common stock.
31.	Closed the two dividends accounts to Retained Earnings.

Required:

1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place.

Common Stock
		Jan. 1 Bal.	2,400,000
		Apr. 13
		July 16
		Dec. 31 Bal.

Paid-In Capital in Excess of Stated Value-Common Stock
		Jan. 1 Bal.	450,000
		Apr. 13
		June 14
		Dec. 31 Bal.

Retained Earnings
Dec. 31		Jan. 1 Bal.	5,450,000
		Dec. 31
		Dec. 31 Bal.

Treasury Stock
Jan. 1 Bal.	336,000
Dec. 31 Bal.

Paid-In Capital from Sale of Treasury Stock

Stock Dividends Distributable

Stock Dividends

Cash Dividends

2. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 15. Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $25,920.

Date	Account	Debit	Credit
Jan. 15

Mar. 15. Sold all of the treasury stock for $17 per share.

Date	Account	Debit	Credit
Mar. 15

Apr. 13. Issued 45,000 shares of common stock for $720,000

Date	Account	Debit	Credit
Apr. 13

June 14. Declared a 4% on common stock, to be capitalized at the market price of the stock, which is $18 per share.

Date	Account	Debit	Credit
June 14

July 16. Issued stock for stock dividend declared on June 14.

Date	Account	Debit	Credit
July 16

Oct. 30. Purchased 15,000 shares of treasury stock for $19 per share.

Date	Account	Debit	Credit
Oct. 30

Dec. 30. Declared a $0.15-per-share dividend on common stock.

Date	Account	Debit	Credit
Dec. 30

Dec. 31. Closed the two dividends accounts to Retained Earnings.

Date	Account	Debit	Credit
Dec. 31

3. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y1. Assume that net income was $5,668,000 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