Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$25 par value, 70,000 shares authorized, 42,000 shares issued and outstanding Paid-in capital in excess of par value, common stock $1,050,000 84,000 382,000 Retained earnings Total stockholders' equity $1,516,000 During the current year, the following transactions affected its stockholders' equity accounts. January 2 Purchased 4,200 shares of its own stock at $25 cash per share. Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of January 7 record. Paid the dividend declared on January 7. February 28 July 9 August 27 Sold 1,680 of its treasury shares at $30 cash per share. Sold 2,100 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 $64,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the current year ended December 31. 3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year.
Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$25 par value, 70,000 shares authorized, 42,000 shares issued and outstanding Paid-in capital in excess of par value, common stock $1,050,000 84,000 382,000 Retained earnings Total stockholders' equity $1,516,000 During the current year, the following transactions affected its stockholders' equity accounts. January 2 Purchased 4,200 shares of its own stock at $25 cash per share. Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of January 7 record. Paid the dividend declared on January 7. February 28 July 9 August 27 Sold 1,680 of its treasury shares at $30 cash per share. Sold 2,100 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 $64,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the current year ended December 31. 3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year.
Common stock-$25 par value, 70,000 shares authorized, 42,000 shares
issued and outstanding
$ 1,050,000
Paid-in capital in excess of par value, common stock
Retained earnings
84,000
382,000
Total stockholders' equity
$ 1,516,000
During the current year, the following transactions affected its stockholders' equity accounts.
January 2 Purchased 4,200 shares of its own stock at $25 cash per share.
January 7
Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of
record.
Paid the dividend declared on January 7.
February 28
July 9
August 27
Sold 1,680 of its
treasury shares at $30 cash per share.
Sold 2,100 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 $64,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the current year ended December 31.
3. Prepare the stockholders' equity section of the balance sheet as of December 31 of the current year.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Prepare journal entries to record each of these transactions.
No
Date
General Journal
Debit
Credit
January 02
105,000
Treasury stock, common
Cash
105,000
January 07
56,700
Common dividend payable
Cash
56,700
February 28
56,700✔✔
Common dividend payable
Cash
56,700
July 09
Cash
50,400
Treasury stock, common
42,000
Paid-in capital, treasury stock
August 27
Cash
42,000 x
Paid-in capital, treasury stock
8,400
Paid-in capital in excess of par value, common stock
2,100 x
Treasury stock, common
September 09
Common dividend payable
Cash
October 22
Common dividend payable
Cash
December 31
Income summary
1
2
3
4
5
6
7
8
Retained earnings
Retained earnings
Common stock dividend distributable
< Required 1
33
XX
33
›››
✔
✔
›› **
Required 2 >
✓
XX
33
***
x
83,160
83,160
64,000
139,860
8,400✔✔
52,500
83,160
83,160
64,000
139,860 x
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