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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 |
15,000 | 255,000 |
| 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
b. Prepare a statement of stockholders’ equity. Net income for the year is $170,500.
Transcribed Image Text:Note: Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances).
Night Corporation
Statement of Stockholders' Equity
For Year Ended December 31
Balance, January 1
0 Common shares issued
O Treasury shares sold
Stock Dividends Issued
O Treasury shares acquired
Cash Dividends Declared
Net Income
Balance, December 31
Common
Stock
$
$
Paid-in-Capital
from
Paid-in-Capital
in Excess of Par Treasury Stock
0 $
0
0
0
0
0
0
0 $
0
0
0
0
0
0
0
0 $
$
$
Retained Treasury
Earnings Stock
0
0
0
0
0
0
0
0 $
0 $
0
0
0
0
0
0
0 $
0 $
0
0
0
0
0
0
0 $
Total
0
0
ܘ
ܘ
ܘ
ܘ
ܘ
ܘ
ܘ
Transcribed Image Text:Date
Jan.8
Mar.12
Jun.30
Jul.10
Oct.7
Dec. 18
Dec.31
Dec.31
General Journal
Description
Paid-in-Capital in Excess of Par Value
Issued shares of common stock.
Paid-in-Capital from Treasury Stock
Sold shares of treasury stock.
Paid-in-Capital in Excess of Par Value
Declared stock dividend.
Purchased shares of common stock for treasury.
Declared cash dividend.
Issued shares of common stock declared as dividend.
+
To close the income summary account.
Stock dividends
+ $
To close the dividend accounts.
O
O
(
♦
(
O
Debit
0 $
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Credit
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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