Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $6 par value, 300,000 shares authorized, 60,000 shares 360,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 600,000 From treasury stock 37,500 637,500 Retained earnings 435,000 1,432,500 Less: Treasury stock (6,000 shares) at cost 172,500 Total Stockholdersâ€™ Equity 1,260,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock for $26 cash per share. Mar. 12 Sold all of the treasury shares for $35 cash per share. June 30 Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $31 per share. July 10 Issued the stock dividend declared on June 30. Oct. 7 Acquired 2,500 shares of common stock as treasury stock at $33 cash per share. Dec. 18 Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31. Required a. Prepare journal entries to record the foregoing transactions. b. Prepare a statement of stockholdersâ€™ equity. Net income for the year is $426,250. Journal Entries Statement of Stockholders' Equity General Journal Date Description Debit Credit Jan.8 Answer Answer Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Issued shares of common stock. Mar.12 Answer Answer Answer Answer Answer Answer Paid-in-Capital from Treasury Stock Answer Answer Sold shares of treasury stock. Jun.30 Answer Answer Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Declared stock dividend. Jul.10 Answer Answer Answer Answer Answer Answer Issued shares of common stock declared as dividend. Oct.7 Answer Answer Answer Answer Answer Answer Purchased shares of common stock for treasury. Dec.18 Answer Answer Answer Answer Answer Answer Declared cash dividend. Dec.31 Answer Answer Answer Answer Answer Answer To close the income summary account. Dec.31 Answer Answer Answer Stock dividends Answer Answer Answer Answer Answer To close the dividend accounts.

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $6 par value, 300,000 shares authorized, 60,000 shares 360,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 600,000 From treasury stock 37,500 637,500 Retained earnings 435,000 1,432,500 Less: Treasury stock (6,000 shares) at cost 172,500 Total Stockholdersâ€™ Equity 1,260,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock for $26 cash per share. Mar. 12 Sold all of the treasury shares for $35 cash per share. June 30 Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $31 per share. July 10 Issued the stock dividend declared on June 30. Oct. 7 Acquired 2,500 shares of common stock as treasury stock at $33 cash per share. Dec. 18 Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31. Required a. Prepare journal entries to record the foregoing transactions. b. Prepare a statement of stockholdersâ€™ equity. Net income for the year is $426,250. Journal Entries Statement of Stockholders' Equity General Journal Date Description Debit Credit Jan.8 Answer Answer Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Issued shares of common stock. Mar.12 Answer Answer Answer Answer Answer Answer Paid-in-Capital from Treasury Stock Answer Answer Sold shares of treasury stock. Jun.30 Answer Answer Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Declared stock dividend. Jul.10 Answer Answer Answer Answer Answer Answer Issued shares of common stock declared as dividend. Oct.7 Answer Answer Answer Answer Answer Answer Purchased shares of common stock for treasury. Dec.18 Answer Answer Answer Answer Answer Answer Declared cash dividend. Dec.31 Answer Answer Answer Answer Answer Answer To close the income summary account. Dec.31 Answer Answer Answer Stock dividends Answer Answer Answer Answer Answer To close the dividend accounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Stockholders' Equity: Transactions and Statement
The stockholders' equity section of Night Corporation's balance sheet at January 1 follows:

Common stock, $6 par value, 300,000 shares authorized, 60,000 shares		360,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value	600,000
From treasury stock	37,500	637,500
Retained earnings		435,000
		1,432,500
Less: Treasury stock (6,000 shares) at cost		172,500
Total Stockholdersâ€™ Equity		1,260,000

The following transactions affecting stockholdersâ€™ equity occurred during the year:

Jan.	8	Issued 15,000 shares of previously unissued common stock for $26 cash per share.
Mar.	12	Sold all of the treasury shares for $35 cash per share.
June	30	Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $31 per share.
July	10	Issued the stock dividend declared on June 30.
Oct.	7	Acquired 2,500 shares of common stock as treasury stock at $33 cash per share.
Dec.	18	Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31.

Required
a. Prepare journal entries to record the foregoing transactions.
b. Prepare a statement of stockholdersâ€™ equity. Net income for the year is $426,250.

Journal Entries
Statement of Stockholders' Equity

General Journal
Date	Description	Debit	Credit
Jan.8	Answer	Answer	Answer
	Answer	Answer	Answer
	Paid-in-Capital in Excess of Par Value	Answer	Answer
	Issued shares of common stock.
Mar.12	Answer	Answer	Answer
	Answer	Answer	Answer
	Paid-in-Capital from Treasury Stock	Answer	Answer
	Sold shares of treasury stock.
Jun.30	Answer	Answer	Answer
	Answer	Answer	Answer
	Paid-in-Capital in Excess of Par Value	Answer	Answer
	Declared stock dividend.
Jul.10	Answer	Answer	Answer
	Answer	Answer	Answer
	Issued shares of common stock declared as dividend.
Oct.7	Answer	Answer	Answer
	Answer	Answer	Answer
	Purchased shares of common stock for treasury.
Dec.18	Answer	Answer	Answer
	Answer	Answer	Answer
	Declared cash dividend.
Dec.31	Answer	Answer	Answer
	Answer	Answer	Answer
	To close the income summary account.
Dec.31	Answer	Answer	Answer
	Stock dividends	Answer	Answer
	Answer	Answer	Answer
	To close the dividend accounts.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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