Required:

a. Prepare journal entries (in general journal form) to record the transactions affecting stockholders’ equity that took place during the year.

b. Prepare the lower section of the income statement for the year ended 2019, beginning with income before extraordinary items and showing the extraordinary loss and the net income. Also illustrate the presentation of earnings per shares in the income statement, assuming that earnings per share is determined on the basis of the weighted-average number of shares outstanding during the year.

c. Prepare a statement of retained earnings for the year ended December 31, 2019.

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Q.4 The stockholders' equity of Laila Corporation at December 31, 2019, is shown below. Stockholders' equity: Common stock, $ 10 par, 300,000 shares authorized. 70,000 shares issued and outstanding Additional paid-in capital: common stock Total paid-in capital Retained earnings Total stockholders' equity 700,000 400,000 1,100,000 1,900,000 3,000,000 Transactions affecting stockholders' equity during 2019 are as follows: A 10-for-7 stock split proposed by the board of directors was approved by vote of the stockholders. The 30,000 new shares were distributed to stockholders. Mar.31 The company purchased 15,000 shares of its common stock on the open market at 45 per share. Apr.1 July.1 The company reissued 13,000 shares of treasury stock at 50 per share. July.1The company issued for cash 20,000 shares of previously unissued 7 par value common stock at a price of 70 per share. A cash dividend of 2 per share was declared, payable on December 30 to stockholders of record at December 15. Dec.1 A 10 percent stock dividend was declared; the dividend shares are to be distributed on January 15 of the following year. The market price of the stock on December 22 was 75 per share. Dec.22 2010 Q.4 The stockholders' equity of Laila Corporation at December 31, 2019, is shown below. Stockholders' equity: Common stock, $ 10 par, 300,000 shares authorized. 70,000 shares issued and outstanding Additional paid-in capital: common stock Total paid-in capital Retained earnings Total stockholders' equity 700,000 400,000 1,100,000 1,900,000 3,000,000 Transactions affecting stockholders' equity during 2019 are as follows: A 10-for-7 stock split proposed by the board of directors was approved by vote of the stockholders. The 30,000 new shares were distributed to stockholders. Mar.31 The company purchased 15,000 shares of its common stock on the open market at 45 per share. Apr.1 July.1 The company reissued 13,000 shares of treasury stock at 50 per share. July.1The company issued for cash 20,000 shares of previously unissued 7 par value common stock at a price of 70 per share. A cash dividend of 2 per share was declared, payable on December 30 to stockholders of record at December 15. Dec.1 A 10 percent stock dividend was declared; the dividend shares are to be distributed on January 15 of the following year. The market price of the stock on December 22 was 75 per share. Dec.22 2010

Answer rating: 100% (QA)

a Journal Entries Date Account title and explanations Debit Credit 1Mar No entry 1Apr Treasury stock ... View the full answer