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Entries for Selected Corporate Transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Nav-Go Enterprises' stockholders’ equity...

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

Solutions

Expert Solution

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. $   2,400,000.00
Apr. 13 $      450,000.00
16-Jul $      114,000.00
Dec. 31 Bal. $   2,964,000.00
Paid-In Capital in Excess of Stated Value-Common Stock
Jan. 1 Bal. $      450,000.00
Apr. 13 $      270,000.00
14-Jun $        91,200.00
Dec. 31 Bal. $      811,200.00
Retained Earnings
Dec. 31 $                                                                                                                            247,410.00 Jan. 1 Bal. 5,450,000
Dec. 31 5668000
Dec. 31 Bal. $ 10,870,590.00
Treasury Stock
Jan. 1 Bal. 336,000 Mar.15 $      336,000.00
Oct.30 $                                                                                                                            285,000.00
Dec. 31 Bal. $                                                                                                                            621,000.00
Paid-In Capital from Sale of Treasury Stock
Mar. 15 $        72,000.00
Stock Dividends Distributable
16-Jul $                                                                                                                            114,000.00 14-Jun $      114,000.00
Stock Dividends
14-Jun $                                                                                                                            205,200.00 31-Dec $      205,200.00
Cash Dividends
Dec.30 $                                                                                                                              42,210.00 31-Dec $        42,210.00
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 Cash Dividends Payable [(240,000 shares – 24,000 shares) × $0.12] $   25,920.00
                 Cash $        25,920.00
Mar. 15. Sold all of the treasury stock for $17 per share.
Date Account Debit Credit
Mar. 15 Cash (24,000 shares × $17) $ 408,000.00
           Treasury Stock (24,000 shares × $14.00) $      336,000.00
          Paid-In Capital from Sale of Treasury Stock   $        72,000.00
Apr. 13. Issued 45,000 shares of common stock for $720,000
Date Account Debit Credit
Apr. 13

Cash (45,000 shares × $16)

$ 720,000.00

                 Common Stock (45,000 shares × $10)

$      450,000.00

                 Paid-In Capital in Excess of Stated Value—Common Stock

$      270,000.00
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
14-Jun Stock Dividends [(240,000 shares + 45,000 shares) × 4% × $18] $ 205,200.00
                 Stock Dividends Distributable[(240,000 shares + 45,000 shares) × 4% = 11400 × $10] $      114,000.00
                Paid-In Capital in Excess of Stated Value—Common Stock $        91,200.00
July 16. Issued stock for stock dividend declared on June 14.
Date Account Debit Credit
16-Jul Stock Dividends Distributable   $ 114,000.00
                   Common stock $      114,000.00
Oct. 30. Purchased 15,000 shares of treasury stock for $19 per share.
Date Account Debit Credit
Oct. 30 Treasury Stock (15,000 shares × $19) $ 285,000.00
                     Cash $      285,000.00
Dec. 30. Declared a $0.15-per-share dividend on common stock.
Date Account Debit Credit
Dec. 30 Cash Dividends $   42,210.00
          Cash Dividends Payable   $        42,210.00
(240,000 shares + 45000 shares + 11400 shares - 15000 shares) x $.15
Dec. 31. Closed the two dividends accounts to Retained Earnings.
Date Account Debit Credit
Dec. 31 Retained Earnings $ 247,410.00
            Cash Dividend $        42,210.00
            Stock Dividend $      205,200.00

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