Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders equity accounts of Morrow Enterprises Inc., with balances on
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Question:
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders equity accounts of Morrow Enterprises Inc., with balances on January Y are as follows:
Common stock, $ stated value shares authorized, shares issued $
PaidIn Capital in Excess of Stated ValueCommon Stock
Retained Earnings
Treasury Stock shares, at a cost of $ per share
The following selected transactions occurred during the year:
Jan. Paid cash dividends of $ per share on the common stock. The dividend had been properly recorded when declared on December of the preceding fiscal year for $
Apr. Issued shares of common stock for $ per share.
Jun. Sold all of the treasury stock for $ per share.
Jul. Declared a stock dividend on common stock, to be capitalized at the market price of the stock, which is $ per share.
Aug. Issued the certificates for the dividend declared on July
Nov. Purchased shares of treasury stock for $ per share.
Dec. Declared a $pershare dividend on common stock.
Closed the two dividends accounts to Retained Earnings.
Required:
a Enter the January balances in T accounts for the stockholders equity accounts listed. Also prepare T accounts for the following: PaidIn Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.
b Journalize the entries to record the transactions and post to the eight selected accounts. No post ref is required in the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your final answer to the nearest dollar.
c Prepare a retained earnings statement for the year ended December Y Assume that Morrow Enterprises had net income for the year ended December Y of $ Be sure to complete the statement heading. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. A decrease to retained earnings should be entered as a negative amount.
d Prepare the Stockholders Equity section of the December Y balance sheet. Refer to the chart of accounts and the lists of Labels and Amount Descriptions for the exact wording of text entries. For those boxes in which you must enter subtractive or negative numbers, use a minus sign.
a Enter the January balances in T accounts for the stockholders equity accounts listed. Also prepare T accounts for the following: PaidIn Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. No post ref is required in the journal.
Common Stock
Jan. Bal. Correct
Apr. Correct
Aug. Correct
Dec. Bal. Correct
PaidIn Capital in Excess of Stated ValueCommon Stock
Jan. Bal. Correct
Apr. Correct
Jul. Correct
Dec. Bal. Correct
Retained Earnings
Dec. Correct
Jan. Bal. Correct
Dec. Correct
Dec. Bal. Correct
Treasury Stock
Jan. Bal. Correct
Jun. Correct
Nov. Correct
Dec. Bal. Correct
PaidIn Capital from Sale of Treasury Stock
Jun. Correct
Stock Dividends Distributable
Aug. Correct
Jul. Correct
Stock Dividends
Jul. Correct
Dec. Correct
Cash Dividends
Dec. Correct
Dec. Correct
Points:
The purchase of Treasury Stock is typically recorded using the cost method. When the company resells shares of Treasury Stock pay attention to the price these shares are being sold for and the price originally paid to reacquire these shares. On the date of declaration of a cash dividend, the corporation is legally obligated to pay that dividend. When the company declares a cash or stock dividend keep in mind the previous stock transactions that have occurred; would these transactions have any affect on the amount of the cash dividend?
b Journalize the entries to record the transactions. No post ref is required in the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your final answer to the nearest dollar.
How does grading work?
PAGE
JOURNALACCOUNTING EQUATION
Score:
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
Jan.
Cash Dividends Payable
Cash
Apr.
Cash
Common Stock
PaidIn Capital in Excess of Stated ValueCommon Stock
Jun.
Related Book For
Financial Accounting
ISBN: 9781337913102
16th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider
Posted Date: