Requirement: Using below Stockholders\' Equity and below transactions, prepare T
ID: 2517031 • Letter: R
Question
Requirement: Using below Stockholders' Equity and below transactions, prepare T-accounts for each stockholders' equity account.
Common stock
$1 Par
Add. Paid in Cap
Retained
Earnings
Treasury
Stock
Total Share-
Holders Equity
Bal. 1/1/2015
354,000
10,415,000
2,761,044
-
13,530,044
Common Shares
370,000
12,210,000
Shares Repurchase
(83,500 shares)
(1,670,000)
Cash Dividends
(50,000)
Net Income
2,696,789
Bal. 12/31/2015
724,000
22,625,000
5,407,833
(1,670,000)
27,086,833
Cash Dividend Comm Stock
(75,000)
Stock div 5 for 4
181,000
(181,000)
Net Income
3,805,617
Bal. 12/31/216
905,000
22,625,000
8,957,450
(1,670,000)
31,817,450
Hawkins has two classes of shares: 1) 5% preferred with $10 par value, and 2) common stock with $1 par value.
Mrs. Wheeler was able to to recall the following transactions that occured during 2017:
1/1/17: Issues 400,000 shares of common stock at $31 per share. The underwriter charged a 3% fee for issuing the shares.
1/1/17: Issued 500,000 shares of its preferred sotck at $40 per share. The shares were privately placed and Hawkins did not pay share issue costs.
3/1/17: Purchased 220,000 shares of common stock at $35 per share.
6/30/17: Decalred a $450,000 dividend for the first half of the year.
7/1/17: Sold 105,000 of the treasury shares at $44 per share ( the company uses the FIFO method when determining par value of sold treasury shares)
9/1/17: Declared a distributed property dividend of shares of stock in Byers Corp Hawkins' purchased 3,570,000 shares of Byers Corp in 2016 for 28,560,000. On 9/1/17, shares of Byers Corp were trading at $1/50 per share.
12/31/17: Hawkins' reported a net income of $5,325,691 (which includes the effects of the transactions listed above.
Common stock
$1 Par
Add. Paid in Cap
Retained
Earnings
Treasury
Stock
Total Share-
Holders Equity
Bal. 1/1/2015
354,000
10,415,000
2,761,044
-
13,530,044
Common Shares
370,000
12,210,000
Shares Repurchase
(83,500 shares)
(1,670,000)
Cash Dividends
(50,000)
Net Income
2,696,789
Bal. 12/31/2015
724,000
22,625,000
5,407,833
(1,670,000)
27,086,833
Cash Dividend Comm Stock
(75,000)
Stock div 5 for 4
181,000
(181,000)
Net Income
3,805,617
Bal. 12/31/216
905,000
22,625,000
8,957,450
(1,670,000)
31,817,450
Explanation / Answer
Cash Common Stock Date Debit Credit Balance Date Debit Credit Balance Debit Credit Debit Credit 1/1/17 12028000 12028000 Beg.Bal. 905000 1/1/17 20000000 32028000 1/1/17 400000 1305000 3/1/17 7700000 24328000 1305000 7/1/17 4620000 28948000 1305000 7/15/17 450000 28498000 1305000 1305000 APIC - Common Stock Retained Earnings Date Debit Credit Balance Date Debit Credit Balance Debit Credit Debit Credit Beg.Bal. 22625000 Beg.Bal. 8957450 1/1/17 11628000 34253000 6/30/17 450000 8507450 7/1/17 2197500 36450500 9/1/17 5355000 3152450 36450500 12/31/17 5325691 8478141 36450500 8478141 36450500 8478141 Preferred Stock APIC - Preferred Stock Date Debit Credit Balance Date Debit Credit Balance Debit Credit Debit Credit Beg.Bal. 0 Beg.Bal. 0 1/1/17 5000000 5000000 1/1/17 15000000 15000000 5000000 15000000 5000000 15000000 Cash Dividends Treasury Stock Date Debit Credit Balance Date Debit Credit Balance Debit Credit Debit Credit 6/30/17 450000 450000 Beg.Bal. 1670000 450000 3/1/17 7700000 9370000 450000 7/1/17 2422500 6947500 Dividends Payable Property dividend Distributable Date Debit Credit Balance Date Debit Credit Balance Debit Credit Debit Credit 6/30/17 450000 450000 9/1/17 5355000 5355000 7/15/17 450000 0 5355000
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