Ellis Corporation was organized on June 30, 2005. After 2 1/2 years of profitable operations, the equity

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Ellis Corporation was organized on June 30, 2005. After 2 1/2 years of profitable operations, the equity section of Ellis’s balance sheet was as follows:

Contributed capital:

Common stock, $3 par, 600,000 shares authorized,

200,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600,000

Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800,000

Total stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,400,000


During 2008, the following transactions affected stockholders’ equity:

Jan. 31 Reacquired 10,000 shares of common stock at $32; treasury stock is recorded at cost.

Apr. 1 Declared a 30% stock dividend. (Applies to all issued stock.)

30 Declared a $0.75 cash dividend. (Applies only to outstanding stock.)

June 1 Issued the stock dividend and paid the cash dividend.

Aug. 31 Sold all treasury stock at $35.


Instructions:

Provide the journal entries to record the stock transactions.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Intermediate Accounting

ISBN: 978-0324312140

16th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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