Running Corporation reports the following components of stockholders’ equity at December 31, 2019 Common stock - $20 par value, 250,000 shares authorized, $ 2,000,000 80,000 shares issued and outstanding Paid-in capital in excess of par value, common stock 235,000 Retained earnings 890,000 Total stockholders' equity $ 3,125,000 During 2021, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 6,300 shares of its own stock at $35 cash per share. Jan. 5 Directors declared a $2.00 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. May 5 Sold 3,982 of its treasury shares at $42 cash per share. Sept. 5 Directors declared a $2.00 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $421,000 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. Calculate the ending balance in retained earnings.

Common stock - $20 par value, 250,000 shares authorized,

$ 2,000,000

80,000 shares issued and outstanding

Paid-in capital in excess of par value, common stock

Retained earnings

Total stockholders' equity

$ 3,125,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 69E: Stock Dividends Crystal Corporation has the following information regarding its common stock: S10...

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Running Corporation reports the following components of stockholders’ equity at December 31, 2019

During 2021, the following transactions affected its stockholders’ equity accounts.

Jan. 2	Purchased 6,300 shares of its own stock at $35 cash per share.
Jan. 5	Directors declared a $2.00 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28	Paid the dividend declared on January 5.
May 5	Sold 3,982 of its treasury shares at $42 cash per share.
Sept. 5	Directors declared a $2.00 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct. 28	Paid the dividend declared on September 5.
Dec. 31	Closed the $421,000 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. Calculate the ending balance in retained earnings.

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