Alexander Corporation reports the following components of stockholders equity on December 31, 2015: Common stock$25 par value,
Question:
Alexander Corporation reports the following components of stockholders’ equity on December 31, 2015: |
Common stock—$25 par value, 60,000 shares authorized, 39,000 shares issued and outstanding | $ | 975,000 | ||
Paid-in capital in excess of par value, common stock | 78,000 | |||
Retained earnings | 371,000 | |||
Total stockholders’ equity | $ | 1,424,000 | ||
In year 2016, the following transactions affected its stockholders’ equity accounts. |
Jan. | 2 | Purchased 3,900 shares of its own stock at $25 cash per share. |
Jan. | 7 | Directors declared a $1.50 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record. |
Feb. | 28 | Paid the dividend declared on January 7. |
July | 9 | Sold 1,560 of its treasury shares at $30 cash per share. |
Aug. | 27 | Sold 1,950 of its treasury shares at $20 cash per share. |
Sept. | 9 | Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. |
Oct. | 22 | Paid the dividend declared on September 9. |
Dec. | 31 | Closed the $61,000 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 2016. |
2. | Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.) |
3. | Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.) |
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta