Houghton Company began business on January 1, 2015 by issuing all of its 1,600,0
ID: 2431156 • Letter: H
Question
Houghton Company began business on January 1, 2015 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31 per share. On June 30, Houghton declared a cash dividend of $1.50 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 320,000 of its own shares of stock for $36 per share. On December 22, Houghton resold 160,000 of these shares for $42 per share.
Required:
Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Prepare the stockholders' equity section of the balance sheet as of December 31, 2015 assuming that the net income for the year was $8,500,000.
Houghton Company began business on January 1, 2015 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31 per share. On June 30, Houghton declared a cash dividend of $1.50 per share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On November 1, Houghton reacquired 320,000 of its own shares of stock for $36 per share. On December 22, Houghton resold 160,000 of these shares for $42 per share.
Explanation / Answer
a)
b)
stockholders equity
As on december 31 2015
Date Account Debit credit Jan 1 2015 cash [1600000*31 ] 49600000 common stock [1600000*2] 3200000 Paid in capital in excess of par 46400000 June 30 Cash dividend 2400000 Dividend payable [1600000*1.5] 2400000 July 31 No entry August 30 Dividend payable 2400000 cash 2400000 nov 1 Treasury stock [320000*36] 11520000 cash 11520000 dec 22 cash [160000*42] 6720000 Paid in capital in excess of cost -treasury stock 960000 Treasury stock [160000*36] 5760000Related Questions
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