Question: Ruffalo Enterprises Inc produces aeronautical navigation equipm

Ruffalo Enterprises Inc. produces aeronautical navigation equipment. The stockholders’ equity accounts of Ruffalo Enterprises Inc., with balances on January 1, 2012, are as follows:

Common Stock, $8 stated value (250,000 shares authorized,
175,000 shares issued).................... $1,400,000
Paid-In Capital in Excess of Stated Value............. 700,000
Retained Earnings....................... 1,840,000
Treasury Stock (40,000 shares, at cost).............. 400,000

The following selected transactions occurred during the year:
Jan. 9. Paid cash dividends of $0.10 per share on the common stock. The dividend had been properly recorded when declared on November 30 of the preceding fiscal year for $13,500.
Mar 15. Sold all of the treasury stock for $540,000.
May 13. Issued 50,000 shares of common stock for $680,000.
June 14. Declared a 2% stock dividend on common stock, to be capitalized at the market price of the stock, which is $15 per share.
July 16. Issued the certificates for the dividend declared on June 14.
Oct 30. Purchased 25,000 shares of treasury stock for $320,000.
Dec 30. Declared a $0.12-per-share dividend on common stock.
31. Closed the credit balance of the income summary account, $775,000.
31. Closed the two dividends accounts to Retained Earnings.
1. 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.
2. Journalize the entries to record the transactions, and post to the eight selected accounts.
3. Prepare a retained earnings statement for the year ended December 31, 2012.
4. Prepare the Stockholders’ Equity section of the December 31, 2012, balance sheet.

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  • CreatedOctober 14, 2011
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