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Question
Chapter 13, Problem 2APSA
Requirement-1:
To determine
To prepare:
The
Requirement-1:
Expert Solution
Answer to Problem 2APSA
Solution:
The journal entries to record the transactions for 2016 are as follows:
| Journal entries | |||
| Date | Account title | Debit | Credit |
| Jan. 1 | $ 80,000 | ||
| Cash | $ 80,000 | ||
| Jan. 5 | $ 72,000 | ||
| Common Dividend Payable | $ 72,000 | ||
| Feb. 28 | Common Dividend Payable | $ 72,000 | |
| Cash | $ 72,000 | ||
| Jul. 6 | Cash | $ 36,000 | |
| Treasury Stock | $ 30,000 | ||
| Paid in excess par- Treasury stock | $ 6,000 | ||
| Aug. 22 | Cash | $ 42,500 | |
| Paid in excess par- Treasury stock | $ 6,000 | ||
| Retained earnings (50000-42500-6000) | $ 1,500 | ||
| Treasury Stock | $ 50,000 | ||
| Sept. 5 | Retained earnings | $ 80,000 | |
| Common Dividend Payable | $ 80,000 | ||
| Oct. 28 | Common Dividend Payable | $ 80,000 | |
| Cash | $ 80,000 | ||
| Dec. 31 | Income Summary | $ 388,000 | |
| Retained earnings | $ 388,000 |
Explanation of Solution
Explanation:
The journal entries to record the transactions for 2016 are explained as follows:
| Journal entries | |||
| Date | Account title | Debit | Credit |
| Jan. 1 | Treasury Stock | $ 80,000 | |
| Cash | $ 80,000 | ||
| (Being 4000 treasury shares purchased @ $20 each for total $80,000) | |||
| Jan. 5 | Retained earnings | $ 72,000 | |
| Common Dividend Payable | $ 72,000 | ||
| (Being Cash dividend declared on (40000-4000) 36000 outstanding shares @ $2 each for total $72,000) | |||
| Feb. 28 | Common Dividend Payable | $ 72,000 | |
| Cash | $ 72,000 | ||
| (Being Cash dividend declared paid in cash) | |||
| Jul. 6 | Cash | $ 36,000 | |
| Treasury Stock | $ 30,000 | ||
| Paid in excess par- Treasury stock (36000-30000) | $ 6,000 | ||
| (Being 1500 treasury shares sold for $24 each cash = (1500*24) = $36,000. The cost of these treasury stock is (1500*20) = $30,000 | |||
| Aug. 22 | Cash | $ 42,500 | |
| Paid in excess par- Treasury stock | $ 6,000 | ||
| Retained earnings (50000-42500-6000) | $ 1,500 | ||
| Treasury Stock | $ 50,000 | ||
| (Being 2500 treasury shares sold for $17 each cash = (2500*17) = $42,500. The cost of these treasury stock is (2500*20) = $50,000 | |||
| Sept. 5 | Retained earnings | $ 80,000 | |
| Common Dividend Payable | $ 80,000 | ||
| (Being Cash dividend declared on (36000+1500+2500)= 40,000 outstanding shares @ $2 each for total $80,000) | |||
| Oct. 28 | Common Dividend Payable | $ 80,000 | |
| Cash | $ 80,000 | ||
| (Being Cash dividend declared paid in cash) | |||
| Dec. 31 | Income Summary | $ 388,000 | |
| Retained earnings | $ 388,000 | ||
| (Being net income for the year 388,000 closed) |
Conclusion
Conclusion:
Hence, the journal entries to record the transactions for 2016 are prepared.
2)
To determine
To prepare:
The Statement of Retained earnings for the year ended December 31, 2016
2)
Expert Solution
Answer to Problem 2APSA
Solution:
The Statement of Retained earnings for the year ended December 31, 2016 is as follows:
| Statement of Retained earnings | |
| For the year ended December 31, 2016 | |
| Retained Earnings balance as on Dec. 31, 2015 | $ 270,000 |
| Net Income for the year 2016 | $ 388,000 |
| Cash Dividends Declared | $ (152,000) |
| Treasury stock adjustment | $ (1,500) |
| Retained Earnings balance as on Dec. 31, 2016 | $ 504,500 |
Explanation of Solution
Explanation:
The Statement of Retained earnings for the year ended December 31, 2016 is explained as follows:
| Statement of Retained earnings | |
| For the year ended December 31, 2016 | |
| Retained Earnings balance as on Dec. 31, 2015 | $ 270,000 |
| Add: Net Income for the year 2016 | $ 388,000 |
| Less: Cash Dividends Declared (72000+80000) | $ (152,000) |
| Less: Treasury stock adjustment | $ (1,500) |
| Retained Earnings balance as on Dec. 31, 2016 | $ 504,500 |
Conclusion
Conclusion:
Hence Retained Earnings balance as on Dec. 31, 2016 is $504,500
Requirement-3:
To determine
To prepare:
The
Requirement-3:
Expert Solution
Answer to Problem 2APSA
Solution:
The Stockholder's Equity Section of the Balance sheet as on December 31, 2016 is as follows:
| Stockholder's Equity Section of the Balance sheet | |
| As on December 31, 2016 | |
| Common Stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding | $ 400,000 |
| Paid in capital in excess of par value, common stock | $ 60,000 |
| Retained earnings | $ 504,500 |
| Total Stock holder's Equity | $ 964,500 |
Explanation of Solution
Explanation:
The Stockholder's Equity Section of the Balance sheet as on December 31, 2016 is explained as follows:
| Stockholder's Equity Section of the Balance sheet | |
| As on December 31, 2016 | |
| Common Stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding | $ 400,000 |
| Paid in capital in excess of par value, common stock | $ 60,000 |
| Retained earnings | $ 504,500 |
| Total Stock holder's Equity | $ 964,500 |
Conclusion
Conclusion:
Hence Total Stock holder's Equity as on Dec. 31, 2016 is $964,500
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Chapter 13 Solutions
FUND.ACCT.PRIN -ONLINE ONLY >I<
Ch. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQ
Ch. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Prob. 17DQCh. 13 - Prob. 8DQCh. 13 - Prob. 18DQCh. 13 - Prob. 19DQCh. 13 - Prob. 20DQCh. 13 - Prob. 21DQCh. 13 - Prob. 22DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Prob. 9QSCh. 13 - Prob. 10QSCh. 13 - Prob. 11QSCh. 13 - Prob. 12QSCh. 13 - Prob. 13QSCh. 13 - Prob. 14QSCh. 13 - Prob. 15QSCh. 13 - Prob. 16QSCh. 13 - Prob. 17QSCh. 13 - Prob. 18QSCh. 13 - Prob. 19QSCh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Problem 13-1A Stockholders’ equity transactions...Ch. 13 - Prob. 2APSACh. 13 - Prob. 3APSACh. 13 - Prob. 4APSACh. 13 - Prob. 5APSACh. 13 - Problem 13-1B Stockholders’ equity transactions...Ch. 13 - Prob. 2BPSBCh. 13 - Prob. 3BPSBCh. 13 - Prob. 4BPSBCh. 13 - Prob. 5BPSBCh. 13 - Prob. 13SPCh. 13 - Prob. 1GLPCh. 13 - Prob. 2GLPCh. 13 - Prob. 1BTNCh. 13 - Prob. 2BTNCh. 13 - Prob. 3BTNCh. 13 - Prob. 4BTNCh. 13 - Prob. 5BTNCh. 13 - Prob. 6BTNCh. 13 - Prob. 7BTNCh. 13 - BTN 13–8 Review 30 to 69 minutes of financial news...Ch. 13 - Prob. 9BTN
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