Instructions Journalize the entries to record the transactions. Identify each entry by letter. PR 13-4A Entries for selected corporate transactions OBJ. 3, 4, 5, 6 Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity ac- ity, counts of Morrow Enterprises Inc., with balances on January 1, 2014, are as follows: Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued)....... .. $ 7,500,000 Paid-In Capital in Excess of Stated Value-Common Stock... Retained Earnings 825,000 33,600,000 Treasury Stock (25,000 shares, at cost) 450,000 The following selected transactions occurred during the year: Jan. 22. Paid cash dividends of $0.08 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,000. Apr. 10. Issued 75,000 shares of common stock for $24 per share. June 6. Sold all of the treasury stock for $26 per share. 5. Declared a 4% stock dividend on common stock, to be capitalized at the mar- ket price of the stock, which is $25 per share. July Aug. 15. Issued the certificates for the dividend declared on July 5. Nov. 23. Purchased 30,000 shares of treasury stock for $19 per share. Dec. 28. Declared a $0.10-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, $1,125,000. 31. Closed the two dividends accounts to Retained Earnings. Instructions 1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. 2. Journalize the entries to record the transactions, and post to the eight selected accounts. 3. Prepare a retained earnings statement for the year ended December 31, 2014. 4. Prepare the Stockholders' Equity section of the December 31, 2014, balance sheet. OBJ. 3, 4, 5, Entries for selected corporate transactions PR 13-5A Selected transactions completed by Primo Discount Corporation during the current fiscal 9. Split the common stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,200,000 common shares outstanding. 300 year are as follows: Jan. Feb. 28. Purchased 40,000 shares of the corporation's own common stock at $28, an 75 000 shares of preferred stock ble recording the stock at cost.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
On instructions #1, the answers on a sample answer sheet show Jan 1st bal 7,500,000, Apr 10th 1,500,000, Aug 15th 360,000, and Dec 31st Bal 9,360,000. Can you explain how they calculated the 360,000 and where that figure came from? Thanks!
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