Entries for Selected Corporate Transactions
Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Tolbert Enterprises Inc., with balances on January 1, 2014, are as follows:
|Common Stock, $10 stated value (300,000 shares authorized, 200,000 shares issued)||$2,000,000|
|Paid-In Capital in Excess of Stated Value-Common Stock||400,000|
|Treasury Stock (20,000 shares, at cost)||300,000|
The following selected transactions occurred during the year:
|Jan. 4.||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 $21,600.|
|Apr. 3.||Issued 40,000 shares of common stock for $720,000.|
|June 6.||Sold all of the treasury stock for $360,000.|
|July 1.||Declared a 5% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.|
|Aug. 15.||Issued the certificates for the dividend declared on July 1.|
|Nov. 10.||Purchased 13,000 shares of treasury stock for $260,000.|
|Dec. 27.||Declared a $0.15-per-share dividend on common stock.|
|31.||Closed the credit balance of the income summary account, $4,722,000.|
|31.||Closed the two dividends accounts to Retained Earnings.|
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.
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. 4. 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 $21,600.
Apr. 3. Issued 40,000 shares of common stock for $720,000.
June 6. Sold all of the treasury stock for $360,000.
July 1. Declared a 5% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.
Aug. 15. Issued the certificates for the dividend declared on July 1.
Nov. 10. Purchased 13,000 shares of treasury stock for $260,000.
Dec. 27. Declared a $0.15-per-share dividend on common stock.
Dec. 31. Closed the credit balance of the income summary account, $4,722,000.
Dec. 31. Closed the two dividends accounts to Retained Earnings.
3. Prepare a retained earnings statement for the year ended December 31, 2014.
4. Prepare the Stockholders' Equity section of the December 31, 2014, balance sheet.
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