Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, 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 a cost of $18 per share) 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 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, 20Y5. 4. Prepare the Stockholders' Equity section of the December 31, 20Y5, balance sheet us- ing Method 1 of Exhibit 8.
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, 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 a cost of $18 per share) 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 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, 20Y5. 4. Prepare the Stockholders' Equity section of the December 31, 20Y5, balance sheet us- ing Method 1 of Exhibit 8.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts
of Morrow Enterprises Inc., with balances on January 1, 20Y5, 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 a cost of $18 per share)
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
Transcribed Image Text: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 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, 20Y5.
4. Prepare the Stockholders' Equity section of the December 31, 20Y5, balance sheet us-
ing Method 1 of Exhibit 8.
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