Balthus Corp. reports the following components of stockholders equity on December 31, 2013: Common stock $ 1

Question:

Balthus Corp. reports the following components of stockholders’ equity on December 31, 2013:

Common stock—$ 1 par value, 320,000 shares authorized,

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

Paid- in capital in excess of par value, common stock . . . . . . . . . . 1,400,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160,000

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,760,000

It completed the following transactions related to stockholders’ equity in year 2014:

Jan. 10 Purchased 40,000 shares of its own stock at $ 12 cash per share.

Mar. 2 Directors declared a $ 1.50 per share cash dividend payable on March 31 to the March 15 stock-holders of record.

Mar. 31 Paid the dividend declared on March 2.

Nov. 11 Sold 24,000 of its treasury shares at $ 13 cash per share.

Nov. 25 Sold 16,000 of its treasury shares at $ 9.50 cash per share.

Dec. 1 Directors declared a $ 2.50 per share cash dividend payable on January 2 to the December 10 stockholders of record.

Dec. 31 Closed the $ 1,072,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required

1. Prepare journal entries to record each of these transactions for 2014.

2. Prepare a statement of retained earnings for the year ended December 31, 2014.

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2014.

Common Stock
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