At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the following:
Common Stock, $40 par value, authorized 80,000 shares, 30,000 shares
issued and outstanding ................. $1,200,000
Paid-In Capital in Excess of Par Value—Common ...... 90,000
Total Paid-In Capital by Common Stockholders ....... 1,290,000
Retained Earnings .................... 420,000
Total Stockholders’ Equity ............... $1,710,000
1. Record the transactions in general journal form.
2. Prepare the stockholders’ equity section at year-end, using the Blueprint as a guide.
3. Prepare a statement of retained earnings at December 31, 201X.
Accounts are provided in the working papers that accompany this text. Be sure to put in the beginning balances.
May 5 Mountain View Corporation purchased 2,000 shares of treasury stock at $44.
30 The board of directors voted a $0.50 per share cash dividend payable on June 20 to stockholders of record on June 5.
June 20 Cash dividend declared on May 30 is paid.
Aug. 15 Sold 500 shares of treasury stock at $59 per share.
29 Sold 1,500 shares of treasury stock at $43 per share.
Sept. 25 The board of directors declared a 20% stock dividend distributable on January 2 to stockholders of record on November 2. The market value of the stock is currently $65 per share.
Dec. 31 Closed the net income of $80,000 in the Income Summary account to Retained Earnings.