Trendy Computer Systems reported the following shareholders' equity section as of the beginning of the current year. Trendy Computer issues 110,000 shares of its $0.40 par common stock during the year. The market price of the shares on the date of issue was $48 per share. The company paid $85,000 in underwriting fees to issue the shares. Trendy reported $6,900,000 in net income for the year and declared and paid dividends of $6 per share at year end. a, Prepare the entry to record the new stock issue. b. Now prepare the journal entry to record the payment of cash dividend. c. Prepare the stockholders' equity section of the balance sheet at the end of the year (Enter the accounts in the proper order for the stockholders' equity section the balance sheet. Use parentheses or a minus sign for loss amounts and/or numbers to be subtracted). Info Given, Data Table. Stockholders' Equity Contributed Capital: Common Stock, $0.40 par value, 1,000,000 shares authorized, 235,000 shares issued, and 211,100 shares outstanding $94,000 Additional Paid-in Capital in Excess of Par - Common 9,600,000 Total Contributed Capital $9,694,000 Retained Earnings $20,500,000 Accumulated Other Comprehensive Income (Loss) (410,000) Less: Treasury Stock (23,900 common shares at cost) (956,000) Total Stockholders' Equity $28,828,000

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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Trendy Computer Systems reported the following shareholders' equity section as of the beginning of the current year.

Trendy Computer issues 110,000 shares of its $0.40 par common stock during the year. The market price of the shares on the date of issue was $48 per share. The company paid $85,000 in underwriting fees to issue the shares. Trendy reported $6,900,000 in net income for the year and declared and paid dividends of $6 per share at year end.

a, Prepare the entry to record the new stock issue.

b. Now prepare the journal entry to record the payment of cash dividend.

c. Prepare the stockholders' equity section of the balance sheet at the end of the year (Enter the accounts in the proper order for the stockholders' equity section the balance sheet. Use parentheses or a minus sign for loss amounts and/or numbers to be subtracted).

Info Given, Data Table.

Stockholders' Equity
Contributed Capital:
Common Stock, $0.40 par value, 1,000,000 shares authorized,
235,000 shares issued, and 211,100 shares outstanding	$94,000
Additional Paid-in Capital in Excess of Par - Common	9,600,000
Total Contributed Capital	$9,694,000
Retained Earnings	$20,500,000
Accumulated Other Comprehensive Income (Loss)	(410,000)
Less: Treasury Stock (23,900 common shares at cost)	(956,000)
Total Stockholders' Equity	$28,828,000

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