Horton Company began business on January 1, 2014 by issuing all of its 1,150,000
ID: 2474636 • Letter: H
Question
Horton Company began business on January 1, 2014 by issuing all of its 1,150,000 authorized shares of its $1 par value common stock for $22 per share. On June 30, they declared a cash dividend of $1.50 per share to stockholders of record on July 31. They paid the cash dividend on August 30. On November 1, Horton reacquired 230,000 of its own shares of stock for $27 per share. On December 22 they resold half of these shares for $33 per share.
Prepare the Stockholders' Equity section of the Balance sheet as of 12/31/2014 assuming that the Net Income for the year was $4,000,000.
Horton Company began business on January 1, 2014 by issuing all of its 1,150,000 authorized shares of its $1 par value common stock for $22 per share. On June 30, they declared a cash dividend of $1.50 per share to stockholders of record on July 31. They paid the cash dividend on August 30. On November 1, Horton reacquired 230,000 of its own shares of stock for $27 per share. On December 22 they resold half of these shares for $33 per share.
b.Prepare the Stockholders' Equity section of the Balance sheet as of 12/31/2014 assuming that the Net Income for the year was $4,000,000.
Explanation / Answer
DR CR 1 Cash 1150000*22 25300000 Capital In excess of Par Value 24150000 Common Stock 1150000 2 Divdend 115000*1.50 1725000 Retained Earnnings 1725000 3 Divdend 115000*1.50 1725000 Cash 1725000 4 Treasury stock 230000*27 6210000 Cash 6210000 DR CR 5 Cash 115000*33 3795000 Additional paid-in capital 115000*1 3680000 Treasury stock 115000*1 115000 Stockholders' Equity section Common Stock 1150000 Capital In excess of Par Value 27830000 Retained Earnnings 2275000 Less Treasury stock 6095000 25160000 Retained Earnnings Net Income 4000000 Less Dividend 1725000 Retained Earnnings 2275000
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