A. Prepare journal entries to record each of these transactions for 2016. B. Pre

ID: 2465379 • Letter: A

Question

A. Prepare journal entries to record each of these transactions for 2016.

B. Prepare a statement of retained earnings for the year ended December 31, 2016.

C. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2016

A. Prepare journal entries to record each of these transactions for 2016.

B. Prepare a statement of retained earnings for the year ended December 31, 2016.

C. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2016

(A)

2 jan Treasury stock (3500*$25) Dr.$87500

To cash $87500

Jan7 Retained Earning Dr.$47250

To cash dividend payable(31500 *$1.5) $47250

Note:- Number of share issued = 35000 - 3500

=31500 shares

Feb 28 Cash dividend payable Dr.$47250

To cash $47250

July 9 cash (1400 * $30) Dr. $42000

To paid in captal in excess of par[($30 - $25)*1400] $7000

To Treasury Stock ( 1400 *$25) $35000

Aug 27 cash (1750 * $20) Dr. $35000

paid in captal from treasury stock [($25 - $20)*1750] Dr.$8750

To Treasury Stock ( 1750 *$25) $43750

Sept 9 Retained Earning Dr.$63000

To cash dividend payable(31500 *$2) $63000

Oct22 Cash Dividend payable Dr.$63000

To cash $63000

Dec31 Net Income Dr.$57000

To retained Earning $57000

(B) Statement of Retained Earning :

Opening balance as on 31 Dec,2015 $357000

Add: Net income $57000

less: Cash Dividend($47250 + $63000) ($110250)

Ending balance as on 31, Dec,2016 $303750

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