No. Account Titles and Explanation 1. Treasury Stock Cash 2. Retained Earnings Dividends Payable 3. Dividends Payable Cash 4. Cash Treasury Stock Paid-in Capital from Treasury Stock 5. Treasury Stock Cash 6. Cash Retained Earnings Paid-in Capital from Treasury Stock Treasury Stock Debit 28130 94622 94622 29290 51500 36480 1500 1160 Credit 28130 94622 94622 28130 1160 51500 39140 Common Stock Retained Earnings NOVAK COMPANY Stockholders' Equity December 31, 2026 Total Paid-in Capital and Retained Earnings Less Treasury Stock Total Stockholders' Equity LA 459100 258378 717478 12360 705118
Novak Company has the following stockholders' equity accounts at December 31, 2025.
Common Stock ($100 par value, authorized 7,600 shares) $459,100
Retained Earnings 266,700
a. Prepare entries in journal form to record the following transactions, which took place during 2026
1. 290 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.)
2. A $22 per share cash dividend was declared.
3. The dividend declared in (2) above was paid.
4. The treasury shares purchased in (1) above were resold at $101 per share.
5. 500 shares of outstanding stock were purchased at $103 per share.
6. 380 of the shares purchased in (5) above were resold at $96 per share.
b. Prepare the stockholders' equity section of Novak Company's balance sheet after giving effect to these transactions, assuming that the net income for 2026 was $86,300. State law requires restriction of retained earnings for the amount of treasury stock. The answer is not 705,118
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