The stockholders’ equity section of Day Corporation’s balance sheet at January 1 follows: Common stock, $10 par value, 200,000 shares authorized,27,000 shares $270,000 issued, 8,000 shares are in the treasury Additional paid-in capital In excess of par value $315,000 From treasury stock 18,000 333,000 Retained earnings 298,000 901,000 Less: Treasury stock (8,000 shares) at cost 208,000 Total Stockholders' Equity $693,000 The following transactions affecting stockholders’ equity occurred during the year: Jan. 8 Issued 10,000 shares of previously unissued common stock for $27 cash per share. Mar. 12 Sold all of the treasury shares for $30 cash per share. June 30 Declared a six percent stock dividend on all outstanding shares of common stock. The market value of the stock was $40 per share. July 10 Issued the stock dividend declared on June 30. Oct. 7 Acquired 1,500 shares of common stock as treasury stock at $32 cash per share. Dec. 18 Declared a cash dividend of 80 cents 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 stockholders' equity. Net income for the year is $198,000. Journal Entries Statement of Stockholders' Equity General Journal Date Description Debit Credit Jan.08 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.07 Answer Answer Answer Answer Answer Answer Purchased shares of common stock for treasury. Dec.18 Answer Answer Answer Answer Answer Answer Declared cash dividend. Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances). DAY 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 Answer Answer Answer Answer Answer Answer Answer Common shares issued Answer Answer Answer Answer Answer Answer Answer Treasury shares sold Answer Answer Answer Answer Answer Answer Stock Dividends Issued Answer Answer Answer Answer Answer Answer Answer Treasury shares acquired Answer Answer Answer Answer Answer Answer Cash Dividends Declared Answer Answer Answer Answer Answer Answer Net Income Answer Answer Answer Answer Answer Answer Balance, December 31 Answer Answer Answer Answer Answer Answer

The stockholders’ equity section of Day Corporation’s balance sheet at January 1 follows: Common stock, $10 par value, 200,000 shares authorized,27,000 shares $270,000 issued, 8,000 shares are in the treasury Additional paid-in capital In excess of par value $315,000 From treasury stock 18,000 333,000 Retained earnings 298,000 901,000 Less: Treasury stock (8,000 shares) at cost 208,000 Total Stockholders' Equity $693,000 The following transactions affecting stockholders’ equity occurred during the year: Jan. 8 Issued 10,000 shares of previously unissued common stock for $27 cash per share. Mar. 12 Sold all of the treasury shares for $30 cash per share. June 30 Declared a six percent stock dividend on all outstanding shares of common stock. The market value of the stock was $40 per share. July 10 Issued the stock dividend declared on June 30. Oct. 7 Acquired 1,500 shares of common stock as treasury stock at $32 cash per share. Dec. 18 Declared a cash dividend of 80 cents 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 stockholders' equity. Net income for the year is $198,000. Journal Entries Statement of Stockholders' Equity General Journal Date Description Debit Credit Jan.08 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.07 Answer Answer Answer Answer Answer Answer Purchased shares of common stock for treasury. Dec.18 Answer Answer Answer Answer Answer Answer Declared cash dividend. Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances). DAY 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 Answer Answer Answer Answer Answer Answer Answer Common shares issued Answer Answer Answer Answer Answer Answer Answer Treasury shares sold Answer Answer Answer Answer Answer Answer Stock Dividends Issued Answer Answer Answer Answer Answer Answer Answer Treasury shares acquired Answer Answer Answer Answer Answer Answer Cash Dividends Declared Answer Answer Answer Answer Answer Answer Net Income Answer Answer Answer Answer Answer Answer Balance, December 31 Answer Answer Answer Answer Answer Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The stockholders’ equity section of Day Corporation’s balance sheet at January 1 follows:

Common stock, $10 par value, 200,000 shares authorized,27,000 shares		$270,000
issued, 8,000 shares are in the treasury
Additional paid-in capital
In excess of par value	$315,000
From treasury stock	18,000	333,000
Retained earnings		298,000
		901,000
Less: Treasury stock (8,000 shares) at cost		208,000
Total Stockholders' Equity		$693,000

The following transactions affecting stockholders’ equity occurred during the year:

Jan.	8	Issued 10,000 shares of previously unissued common stock for $27 cash per share.
Mar.	12	Sold all of the treasury shares for $30 cash per share.
June	30	Declared a six percent stock dividend on all outstanding shares of common stock. The market value of the stock was $40 per share.
July	10	Issued the stock dividend declared on June 30.
Oct.	7	Acquired 1,500 shares of common stock as treasury stock at $32 cash per share.
Dec.	18	Declared a cash dividend of 80 cents 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 stockholders' equity. Net income for the year is $198,000.

Journal Entries
Statement of Stockholders' Equity

General Journal
Date	Description	Debit	Credit
Jan.08	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.07	Answer	Answer	Answer
	Answer	Answer	Answer
	Purchased shares of common stock for treasury.
Dec.18	Answer	Answer	Answer
	Answer	Answer	Answer
	Declared cash dividend.

Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances).

DAY 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	Answer	Answer	Answer	Answer	Answer	Answer
Answer	Common shares issued	Answer	Answer	Answer	Answer	Answer	Answer
Answer	Treasury shares sold	Answer	Answer	Answer	Answer	Answer	Answer
Stock Dividends Issued	Answer	Answer	Answer	Answer	Answer	Answer
Answer	Treasury shares acquired	Answer	Answer	Answer	Answer	Answer	Answer
Cash Dividends Declared	Answer	Answer	Answer	Answer	Answer	Answer
Net Income	Answer	Answer	Answer	Answer	Answer	Answer
Balance, December 31	Answer	Answer	Answer	Answer	Answer	Answer

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.

Expert Solution

Explanation -

Stockholder's Equity -

Stockholder's Equity includes the amount contributed by shareholders issued in the form of common stock, Paid-in Capital, Preferred Stock, Also includes Retained Earnings which is the accumulated profit earned by the company and treasury stock.

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here