O Not secure ezto.mheducation.com/hm.tpx Houghton Company began business on Janu
ID: 2519009 • Letter: O
Question
O Not secure ezto.mheducation.com/hm.tpx Houghton Company began business on January 1, 2015 by issuing all of its 1,650,000 authorized shares of its $1 par value common slock for $32 per share. On June 30, Houghton declared a cash dividend of $1.75 share to stockholders of record on July 31. Houghton paid the cash dividend on August 30. On Houghton resold 165,000 of these shares for $43 per share. Required: a. Prepare all of the necessary journal entries to record the events described above. (If no entry is 1, Houghton reacquired 330,000 of its own shares of stock for $37 per share. On December 22, required for a transactionlevent, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet Cash 57,750,000 Common Stock 57,750,000 2 Retained Earnings 2,887,500 Dvidends (Declared) 2,887,500 3 Retained Earnings 2,887,500 Dividends Payable 2,887,500 4Treasury Stock 12,210,000 Cash 12,210,000 5 Cash 7.095,000 W 7,095,000 Treasury Stook ype here to searcExplanation / Answer
Answer
Date
Journal
Debit
Credit
1-Jan-15
Cash (1,650,000 Shares * $32)
52,800,000
Common Stock
(1,650,000 Shares * $1)
1,650,000
Paid-In-Capital in excess of Par - Common Stock
(1,650,000 Shares * $31)
51,150,000
(Being shares issued at $31 Premium)
30-Jun
Dividend Expense ((1,650,000 Shares * $1.75)
2,887,500
Dividend Payable
2,887,500
(Being dividend declared)
31-Aug
Dividend Payable
2,887,500
Cash
2,887,500
(Being Dividend declared paid)
1-Nov
Treasury Stock (330,000 Shares * $37)
12,210,000
Cash
12,210,000
(Being own shares purchased @$37 Each)
22-Dec
Cash (165,000 * $43)
7,095,000
Treasury Stock (165,000 * $37)
6,105,000
Paid-In-Capital in excess of Par - Treasury Stock
(165,000 * $6)
990,000
(Being 165,000 Treasury Stock reissued at premium)
Stockholder's Equity
Common Stock
1,650,000
Paid-In-Capital in excess of Par - Common Stock
51,150,000
Paid-In-Capital in excess of Par - Treasury Stock
990,000
Dividend Payment
2,887,500
Net Income
9,000,000
Total Paid in Capital
59,902,500
Less: Treasury Stock
(6,105,000)
Total Shareholder's Equity
53,797,500
Date
Journal
Debit
Credit
1-Jan-15
Cash (1,650,000 Shares * $32)
52,800,000
Common Stock
(1,650,000 Shares * $1)
1,650,000
Paid-In-Capital in excess of Par - Common Stock
(1,650,000 Shares * $31)
51,150,000
(Being shares issued at $31 Premium)
30-Jun
Dividend Expense ((1,650,000 Shares * $1.75)
2,887,500
Dividend Payable
2,887,500
(Being dividend declared)
31-Aug
Dividend Payable
2,887,500
Cash
2,887,500
(Being Dividend declared paid)
1-Nov
Treasury Stock (330,000 Shares * $37)
12,210,000
Cash
12,210,000
(Being own shares purchased @$37 Each)
22-Dec
Cash (165,000 * $43)
7,095,000
Treasury Stock (165,000 * $37)
6,105,000
Paid-In-Capital in excess of Par - Treasury Stock
(165,000 * $6)
990,000
(Being 165,000 Treasury Stock reissued at premium)
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