Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises' stockholders' equity accounts, with balan on January 1, 20Y6, are as follows: Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued) Paid-In Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (25,000 shares, at cost) $7,500,000 825,000 33,600,000 450,000
Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises' stockholders' equity accounts, with balan on January 1, 20Y6, are as follows: Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued) Paid-In Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (25,000 shares, at cost) $7,500,000 825,000 33,600,000 450,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Can you show how to prepare the "

Transcribed Image Text:Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises' stockholders' equity accounts, with balances
on January 1, 20Y6, are as follows:
Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued)
Paid-In Capital in Excess of Stated Value-Common Stock
Retained Earnings
Treasury Stock (25,000 shares, at cost)
The following selected transactions occurred during the year:
Jan.
Apr.
Jun.
Jul.
Aug.
Nov.
Dec.
22
6
$7,500,000
15
825,000
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.
10 Issued 75,000 shares of common stock for $24 per share.
Sold all of the treasury stock for $26 per share.
5 Declared a 4% Stock dividend on common stock, to be capitalized at the market price of the
stock, which is $25 per share.
Issued shares of stock for the Stock dividend declared on July 5.
23 Purchased 30,000 shares of treasury stock for $19 per share.
28 Declared a $0.10-per-share dividend on common stock.
Closed the two dividends accounts to Retained Earnings.
31
33,600,000
450,000
Required:
1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed.
2. Journalize the entries to record the transactions, and post to the eight selected accounts. Assume that the
closing entry for revenues and expenses has been made and post net income of $1,125,000 to the retained
earnings account.
3. Prepare a statement of stockholders' equity for the year ended December 31, 20Y6. Assume that net income
was $1,125,000 for the year ended December 31, 20Y6.
4. Prepare the "Stockholders' Equity" section of the December 31, 20Y6, balance sheet.

Transcribed Image Text:Balances, January 1
Issued common stock
Net income
Cash dividends
Stock dividends
Sale of treasury stock
Purchase of treasury stock
Balances, December 31
Morrow Enterprises Inc.
Statement of Stockholders' Equity
For the Year Ended December 31, 20Y6
Paid-In Capital
in Excess of
Stated Value
$825,000.00
300,000.00
Common Stock
$7,500,000.00
1,500,000.00
360,000.00
90,000.00
Paid-In Capital
from Sale of
Treasury Stock
200,000.00
Retained
Earnings
Treasury Stock
1.125.000.00
(43,800.00)
(450,000.00)
Total
$33,600,000.00 $(450,000.00) $41,475,000.0
1,800,000.0
1,125,000.0
(43,800.0
0.0
450,000.00
650,000.0
(570,000.00)
(570,000.0
$9,360,000.00 $1,215,000.00 $200,000.00 $34,231,200.00 $(570,000.00) $44,436,200.0
Expert Solution
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Introduction
Disclaimer :
As per question we have require to solve Requirement 4.
Stockholders' Equity section:
The stockholders' equity portion of the balance sheet includes information about the stockholders' value. Its two subdivisions are Paid-in Capital (from Stockholder Investments) and Retained Earnings (profits generated by the corporation.)
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