Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity
ID: 2417828 • Letter: M
Question
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balances on January 1, 2016, are as follows:
The following selected transactions occurred during the year:
Chart of Accounts
Amount Descriptions
T Accounts
A. Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Post the journal entries from part B to the eight selected accounts. No post ref is required in the journal.
Journal
B. Journalize the entries to record the transactions. No post ref is required in the journal. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Retained Earnings Statement
C. Prepare a retained earnings statement for the year ended December 31, 2016. Enter all amounts as positive numbers. The word “Less” is not required. Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.
Morrow Enterprises
Retained Earnings Statement
For the Year Ended December 31, 2016
1
2
3
4
5
Stockholders’ Equity
D. Prepare the Stockholders’ Equity section of the December 31, 2016 balance sheet. “Less” or “Deduct” will automatically appear if it is required. Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.
Stockholders’ Equity
1
Paid-in capital:
2
3
4
5
6
7
8
9
Common stock, $20 stated value; 500,000 shares authorized, 383,000 issued $7,660,000 Paid-In Capital in Excess of Stated Value—Common Stock 957,500 Retained Earnings 35,012,000 Treasury Stock (25,700 shares, at cost) 462,600Explanation / Answer
A and B.
C.
Retained Earning account is prepared as under:
D.
Stockholders' Equity account statement is prepared as under:
DATE DESCRIPTION POST. REF. DEBIT CREDIT Jan-22 Dividend Payable 21,438 Cash 21,438 (For dividend paid) Apr-10 Cash 1,771,000 Common Stock 1,540,000 Additional paid in capital 231,000 (For 77,000 shares issued at $23) Jun-06 Cash 693,900 Treasury Stock 462,600 Additional paid in capital 231,300 (For treasury stock sold) Jul-05 Stock Dividend 358,800 Stock Dividend Distributable 276,000 Additional paid in capital 82,800 (For 3% dividend declared at $26 market price 383,000 shares +25,700 shares+77,000 shares- 25,700 shares= 460,000 shares 460,000*3%*$26 460,000*3%*$20 Aug-15 Stock Dividend Distributable 276,000 Common Stock 276,000 (For stock issued) 460,000*1.03= 473,800 shares Nov-23 Treasury stock 660,000 Cash 660,000 (For 33,000 treasury stock purchased) Dec-28 Cash Dividend 35,264 Cash Dividend Payable 35,264 (For $0.08 per share dividend declared) 473,800-33,000=440,800 shares Dec-31 Income Summary 1,196,500 Retained Earnings 1,196,500 (For income closed) Dec-31 Retained Earnings 394,064 Stock Dividend 358,800 Cash Dividend 35,264 (For dividend account closed to retained earnings account)Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.