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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 Stockholders’ Equity   540,000   The following transactions affecting stockholders’ 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 stockholders’ equity. Net income for the year is $170,500.

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 Stockholders’ Equity   540,000   The following transactions affecting stockholders’ 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 stockholders’ equity. Net income for the year is $170,500.

FINANCIAL ACCOUNTING
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 Stockholders’ Equity   540,000

 

The following transactions affecting stockholders’ 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 stockholders’ equity. Net income for the year is $170,500. 

Note: Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances). Night Corporation Statement of Stockholders' Equity For Year Ended December 31 Balance, January 1 0 Common shares issued O Treasury shares sold Stock Dividends Issued O Treasury shares acquired Cash Dividends Declared Net Income Balance, December 31 Common Stock $ $ Paid-in-Capital from Paid-in-Capital in Excess of Par Treasury Stock 0 $ 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 $ $ $ Retained Treasury Earnings Stock 0 0 0 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ Total 0 0 ܘ ܘ ܘ ܘ ܘ ܘ ܘ
Transcribed Image Text:Note: Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances). Night Corporation Statement of Stockholders' Equity For Year Ended December 31 Balance, January 1 0 Common shares issued O Treasury shares sold Stock Dividends Issued O Treasury shares acquired Cash Dividends Declared Net Income Balance, December 31 Common Stock $ $ Paid-in-Capital from Paid-in-Capital in Excess of Par Treasury Stock 0 $ 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 $ $ $ Retained Treasury Earnings Stock 0 0 0 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ Total 0 0 ܘ ܘ ܘ ܘ ܘ ܘ ܘ
Date Jan.8 Mar.12 Jun.30 Jul.10 Oct.7 Dec. 18 Dec.31 Dec.31 General Journal Description Paid-in-Capital in Excess of Par Value Issued shares of common stock. Paid-in-Capital from Treasury Stock Sold shares of treasury stock. Paid-in-Capital in Excess of Par Value Declared stock dividend. Purchased shares of common stock for treasury. Declared cash dividend. Issued shares of common stock declared as dividend. + To close the income summary account. Stock dividends + $ To close the dividend accounts. O O ( ♦ ( O Debit 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transcribed Image Text:Date Jan.8 Mar.12 Jun.30 Jul.10 Oct.7 Dec. 18 Dec.31 Dec.31 General Journal Description Paid-in-Capital in Excess of Par Value Issued shares of common stock. Paid-in-Capital from Treasury Stock Sold shares of treasury stock. Paid-in-Capital in Excess of Par Value Declared stock dividend. Purchased shares of common stock for treasury. Declared cash dividend. Issued shares of common stock declared as dividend. + To close the income summary account. Stock dividends + $ To close the dividend accounts. O O ( ♦ ( O Debit 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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