Exercise 11-24 (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 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 125 cash per share. January 7 Directors declared a $1.50 per sbare cash dividend payable on February 28 to the February 9 stockholders of record. Tebruary 28 Paid the dividend declared on January 7. Sold 1,680 of its treasury shares at $30 cash per abare. Sold 2,100 of its treasury shares at $21 cash per shere. Directors declared a 12 per share cash dividend payable on October 22 to the September 23 stockholders of record. July August 27 September 9 October 22 Paid the dividend declared on September 9. December 31 Closed the $64,000 credit balance (fron net income) in the Income Sunnery 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.
Exercise 11-24 (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 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 125 cash per share. January 7 Directors declared a $1.50 per sbare cash dividend payable on February 28 to the February 9 stockholders of record. Tebruary 28 Paid the dividend declared on January 7. Sold 1,680 of its treasury shares at $30 cash per abare. Sold 2,100 of its treasury shares at $21 cash per shere. Directors declared a 12 per share cash dividend payable on October 22 to the September 23 stockholders of record. July August 27 September 9 October 22 Paid the dividend declared on September 9. December 31 Closed the $64,000 credit balance (fron net income) in the Income Sunnery 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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Exercise 11-24 (Algo) Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3
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
Retained earnings
Total stockholders' equity
During the current year, the following transactions affected its stockholders' equity accounts.
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
record.
Paid the dividend declared on January 7.
January 2
January 7
February 28
$1,050,000
84,000
382,000
51,516,000
July Sold 1,680 of its treasury shares at $30 cash per share.
August 27 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 21 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.
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