Alex Corporation reports the following components of stockholders equity at December 31 of the prior year .
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Question:
Alex Corporation reports the following components of stockholders equity at December 31 of the prior year.
Common stock$25 par value, 50,000 shares authorized, 30,000 shares issued and outstanding | $ 750,000 |
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Paid-in capital in excess of par value, common stock | 50,000 |
Retained earnings | 340,000 |
Total stockholders equity | $ 1,140,000 |
During the current year, the following transactions affected its stockholders equity accounts.
January 2 | Purchased 3,000 shares of its own stock at $25 cash per share. |
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January 7 | Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record. |
February 28 | Paid the dividend declared on January 7. |
July 9 | Sold 1,200 of its treasury shares at $30 cash per share. |
August 27 | Sold 1,500 of its treasury shares at $21 cash per share. |
September 9 | Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. |
October 22 | Paid the dividend declared on September 9. |
December 31 | Closed the $52,000 credit balance (from net income) in the Income Summary account to Retained Earnings. |
Required:
- Prepare journal entries to record each of these transactions.
- Prepare a statement of retained earnings for the current year ended December 31.
- Prepare the stockholders equity section of the balance sheet as of December 31 of the current year.
Related Book For
Principles Of Financial Accounting (Chapters 1-17)
ISBN: 9781260780147
25th Edition
Authors: John Wild
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