Stockholders' Equity: Transactions and StatementThe stockholders' equity section of Night Corporation's balance sheet at January 1 follows:Common stock, $3 par value, 300,000 shares authorized, 60,000 shares 180,000issued, 6,000 shares in treasury Additional paid-in capital In excess of par value240,000 From treasury stock15,000255,000Retained earnings 174,000 609,000Less: Treasury stock (6,000 shares) at cost 69,000Total Stockholdersâ€™ Equity 540,000 The following transactions affecting stockholdersâ€™ equity occurred during the year:Jan.8Issued 15,000 shares of previously unissued common stock for $10 cash per share.Mar.12Sold all of the treasury shares for $14 cash per share.June30Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $12 per share.July10Issued the stock dividend declared on June 30.Oct.7Acquired 2,500 shares of common stock as treasury stock at $13 cash per share.Dec.18Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31.Requireda. Prepare journal entries to record the foregoing transactions.b. Prepare a statement of stockholdersâ€™ equity. Net income for the year is $170,500. ## General Journal Entries### Date: Jan. 8- **Description:** - Paid-in-Capital in Excess of Par Value - Issued shares of common stock. - **Debit:** - **Credit:** ### Date: Mar. 12- **Description:** - Paid-in-Capital from Treasury Stock - Sold shares of treasury stock. - **Debit:** - **Credit:** ### Date: Jun. 30- **Description:** - Paid-in-Capital in Excess of Par Value - Declared stock dividend. - **Debit:** - **Credit:** ### Date: Jul. 10- **Description:** - Issued shares of common stock declared as dividend. - **Debit:** - **Credit:** ### Date: Oct. 7- **Description:** - Purchased shares of common stock for treasury. - **Debit:** - **Credit:** ### Date: Dec. 18- **Description:** - Declared cash dividend. - **Debit:** - **Credit:** ### Date: Dec. 31- **Description:** - To close the income summary account. - **Debit:** - **Credit:** ### Date: Dec. 31- **Description:** - Stock dividends - To close the dividend accounts. - **Debit:** - **Credit:** This general journal provides a chronological record of financial transactions associated with stock and dividend activities. Each entry includes a description and fields for debit and credit values, though the amounts are unspecified. **Night Corporation Statement of Stockholders' Equity**For Year Ended December 31| | Common Stock | Paid-in-Capital in Excess of Par | Paid-in-Capital from Treasury Stock | Retained Earnings | Treasury Stock | Total ||-------------------------------|--------------|----------------------------------|------------------------------------|-------------------|---------------|---------|| **Balance, January 1** | $ | $ | $ | $ | $ | $ || **Common shares issued** | | | | | | || Treasury shares sold | | | | | | || **Stock Dividends Issued** | | | | | | || Treasury shares acquired | | | | | | || **Cash Dividends Declared** | | | | | | || **Net Income** | | | | | | || **Balance, December 31** | $ | $ | $ | $ | $ | $ |This table represents the statement of stockholders' equity for **Night Corporation** for the year ended December 31. It includes columns for Common Stock, Paid-in-Capital in Excess of Par, Paid-in-Capital from Treasury Stock, Retained Earnings, Treasury Stock, and the Total. Various activities affecting stockholders' equity are listed like issuing common shares, selling treasury shares, acquiring treasury shares, declaring cash dividends, and net income calculations. The table starts with the balances on January 1 and ends with the balances on December 31.

The journal entries are prepared to keep the record of day to day transactions of the business on…

Answered: Stockholders' Equity: Transactions and…

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

Common stock, $3 par value, 300,000 shares authorized, 60,000 shares		180,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value	240,000
From treasury stock	15,000	255,000
Retained earnings		174,000
		609,000
Less: Treasury stock (6,000 shares) at cost		69,000
Total Stockholdersâ€™ Equity		540,000

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

Jan.	8	Issued 15,000 shares of previously unissued common stock for $10 cash per share.
Mar.	12	Sold all of the treasury shares for $14 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 $12 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 $13 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 $170,500.

## General Journal Entries

### Date: Jan. 8
- **Description:**
- Paid-in-Capital in Excess of Par Value
- Issued shares of common stock.
- **Debit:**
- **Credit:**

### Date: Mar. 12
- **Description:**
- Paid-in-Capital from Treasury Stock
- Sold shares of treasury stock.
- **Debit:**
- **Credit:**

### Date: Jun. 30
- **Description:**
- Paid-in-Capital in Excess of Par Value
- Declared stock dividend.
- **Debit:**
- **Credit:**

### Date: Jul. 10
- **Description:**
- Issued shares of common stock declared as dividend.
- **Debit:**
- **Credit:**

### Date: Oct. 7
- **Description:**
- Purchased shares of common stock for treasury.
- **Debit:**
- **Credit:**

### Date: Dec. 18
- **Description:**
- Declared cash dividend.
- **Debit:**
- **Credit:**

### Date: Dec. 31
- **Description:**
- To close the income summary account.
- **Debit:**
- **Credit:**

### Date: Dec. 31
- **Description:**
- Stock dividends
- To close the dividend accounts.
- **Debit:**
- **Credit:**

This general journal provides a chronological record of financial transactions associated with stock and dividend activities. Each entry includes a description and fields for debit and credit values, though the amounts are unspecified.

**Night Corporation Statement of Stockholders' Equity**

For Year Ended December 31

| | Common Stock | Paid-in-Capital in Excess of Par | Paid-in-Capital from Treasury Stock | Retained Earnings | Treasury Stock | Total |
|-------------------------------|--------------|----------------------------------|------------------------------------|-------------------|---------------|---------|
| **Balance, January 1** | $ | $ | $ | $ | $ | $ |
| **Common shares issued** | | | | | | |
| Treasury shares sold | | | | | | |
| **Stock Dividends Issued** | | | | | | |
| Treasury shares acquired | | | | | | |
| **Cash Dividends Declared** | | | | | | |
| **Net Income** | | | | | | |
| **Balance, December 31** | $ | $ | $ | $ | $ | $ |

This table represents the statement of stockholders' equity for **Night Corporation** for the year ended December 31. It includes columns for Common Stock, Paid-in-Capital in Excess of Par, Paid-in-Capital from Treasury Stock, Retained Earnings, Treasury Stock, and the Total. Various activities affecting stockholders' equity are listed like issuing common shares, selling treasury shares, acquiring treasury shares, declaring cash dividends, and net income calculations. The table starts with the balances on January 1 and ends with the balances on December 31.

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