Alexander Corporation reports the following components of stockholders’ equity at December 31, 2019. Common stock—$25 par value, 70,000 shares authorized, 44,000 shares issued and outstanding $ 1,100,000 Paid-in capital in excess of par value, common stock 88,000 Retained earnings 389,000 Total stockholders’ equity $ 1,577,000 During 2020, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 4,400 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 1,760 of its treasury shares at $30 cash per share. Aug. 27 Sold 2,200 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 $66,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2020.
Alexander Corporation reports the following components of stockholders’ equity at December 31, 2019. Common stock—$25 par value, 70,000 shares authorized, 44,000 shares issued and outstanding $ 1,100,000 Paid-in capital in excess of par value, common stock 88,000 Retained earnings 389,000 Total stockholders’ equity $ 1,577,000 During 2020, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 4,400 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 1,760 of its treasury shares at $30 cash per share. Aug. 27 Sold 2,200 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 $66,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2020. 3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 84PSB: Statement of Stockholders' Equity At the end of 2019, Stanley Utilities Inc. had the following...
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Question
Alexander Corporation reports the following components of
Common stock—$25 par value, 70,000 shares authorized, 44,000 shares issued and outstanding |
$ | 1,100,000 | |
Paid-in capital in excess of par value, common stock | 88,000 | ||
389,000 | |||
Total stockholders’ equity | $ | 1,577,000 | |
During 2020, the following transactions affected its stockholders’ equity accounts.
Jan. | 2 | Purchased 4,400 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 1,760 of its treasury shares at $30 cash per share. | ||
Aug. | 27 | Sold 2,200 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 $66,000 credit balance (from net income) in the Income Summary account to Retained Earnings. |
Required:
1. Prepare
2. Prepare a statement of retained earnings for the year ended December 31, 2020.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2020.
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