Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows: Common stock, $20 stated value (500,000 shares authorized, 383,000 shares issued) $7,660,000 Paid-In Capital in Excess of Stated Value—Common Stock 957,500 Retained Earnings 35,012,000 Treasury Stock (25,700 shares, at a cost of $18 per share) 462,600 The following selected transactions occurred during the year: Jan. 22 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 $21,438. Apr. 10 Issued 77,000 shares of common stock for $23 per share. Jun. 6 Sold all of the treasury stock for $27 per share. Jul. 5 Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share. Aug. 15 Issued the certificates for the dividend declared on July 5. Nov. 23 Purchased 33,000 shares of treasury stock for $20 per share. Dec. 28 Declared a $0.08-per-share dividend on common stock. 31 Closed the two dividends accounts to Retained Earnings. Required: a. Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. b. Journalize the entries to record the transactions and post to the eight selected accounts. No post ref is required in the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your final answer to the nearest dollar. c. Prepare a retained earnings statement for the year ended December 31, 20Y5. Assume that Morrow Enterprises had net income for the year ended December 31, 20Y5, of $1,196,500. Be sure to complete the statement heading. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. A decrease to retained earnings should be entered as a negative amount. d. Prepare the Stockholders’ Equity section of the December 31, 20Y5, balance sheet. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. For those boxes in which you must enter subtractive or negative numbers, use a minus sign.

Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows: Common stock, $20 stated value (500,000 shares authorized, 383,000 shares issued) $7,660,000 Paid-In Capital in Excess of Stated Value—Common Stock 957,500 Retained Earnings 35,012,000 Treasury Stock (25,700 shares, at a cost of $18 per share) 462,600 The following selected transactions occurred during the year: Jan. 22 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 $21,438. Apr. 10 Issued 77,000 shares of common stock for $23 per share. Jun. 6 Sold all of the treasury stock for $27 per share. Jul. 5 Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share. Aug. 15 Issued the certificates for the dividend declared on July 5. Nov. 23 Purchased 33,000 shares of treasury stock for $20 per share. Dec. 28 Declared a $0.08-per-share dividend on common stock. 31 Closed the two dividends accounts to Retained Earnings. Required: a. Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. b. Journalize the entries to record the transactions and post to the eight selected accounts. No post ref is required in the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your final answer to the nearest dollar. c. Prepare a retained earnings statement for the year ended December 31, 20Y5. Assume that Morrow Enterprises had net income for the year ended December 31, 20Y5, of $1,196,500. Be sure to complete the statement heading. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. A decrease to retained earnings should be entered as a negative amount. d. Prepare the Stockholders’ Equity section of the December 31, 20Y5, balance sheet. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. For those boxes in which you must enter subtractive or negative numbers, use a minus sign.

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 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...

See similar textbooks

Related questions

Question

Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows:

Common stock, $20 stated value (500,000 shares authorized, 383,000 shares issued)	$7,660,000
Paid-In Capital in Excess of Stated Value—Common Stock	957,500
Retained Earnings	35,012,000
Treasury Stock (25,700 shares, at a cost of $18 per share)	462,600

The following selected transactions occurred during the year:

Jan.	22	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 $21,438.
Apr.	10	Issued 77,000 shares of common stock for $23 per share.
Jun.	6	Sold all of the treasury stock for $27 per share.
Jul.	5	Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share.
Aug.	15	Issued the certificates for the dividend declared on July 5.
Nov.	23	Purchased 33,000 shares of treasury stock for $20 per share.
Dec.	28	Declared a $0.08-per-share dividend on common stock.
	31	Closed the two dividends accounts to Retained Earnings.

Required:

a.	Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.
b.	Journalize the entries to record the transactions and post to the eight selected accounts. No post ref is required in the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your final answer to the nearest dollar.
c.	Prepare a retained earnings statement for the year ended December 31, 20Y5. Assume that Morrow Enterprises had net income for the year ended December 31, 20Y5, of $1,196,500. Be sure to complete the statement heading. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. A decrease to retained earnings should be entered as a negative amount.
d.	Prepare the Stockholders’ Equity section of the December 31, 20Y5, balance sheet. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. For those boxes in which you must enter subtractive or negative numbers, use a minus sign.

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION