Running Corporation reports the following components of stockholders’ equity at December 31, 2019 Common stock - $20 par value, 250,000 shares authorized, $ 2,000,000 80,000 shares issued and outstanding Paid-in capital in excess of par value, common stock 235,000 Retained earnings 890,000 Total stockholders' equity $ 3,125,000 During 2021, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 6,300 shares of its own stock at $35 cash per share. Jan. 5 Directors declared a $2.00 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. May 5 Sold 3,982 of its treasury shares at $42 cash per share. Sept. 5 Directors declared a $2.00 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $421,000 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. Calculate the ending balance in retained earnings.

Common stock - $20 par value, 250,000 shares authorized,

$ 2,000,000

80,000 shares issued and outstanding

Paid-in capital in excess of par value, common stock

Retained earnings

Total stockholders' equity

$ 3,125,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Running Corporation reports the following components of stockholders’ equity at December 31, 2019

During 2021, the following transactions affected its stockholders’ equity accounts.

Jan. 2	Purchased 6,300 shares of its own stock at $35 cash per share.
Jan. 5	Directors declared a $2.00 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28	Paid the dividend declared on January 5.
May 5	Sold 3,982 of its treasury shares at $42 cash per share.
Sept. 5	Directors declared a $2.00 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct. 28	Paid the dividend declared on September 5.
Dec. 31	Closed the $421,000 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. Calculate the ending balance in retained earnings.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions