7. value: 6.30 points Exercise 11-18 Cash dividends, treasury stock, and stateme

Question

7. value: 6.30 points Exercise 11-18 Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Alexander Corporation reports the following components of stockholders' equity on December 31, 2015 Common stock $25 par value, 50,000 shares authorized, 31,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained eamings S 775,000 62,000 343,000 Total stockholders' equity S 1,180,000 In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 3,100 shares of its own stock at $25 cash per share. Jan. 7 Directors declared a $1.50 per share cash dividend payable on Feb. 28 to the Feb. 9 Feb. 28 July 9 Aug. 27 Sept. 9 stockholders of record Paid the dividend declared on January 7 Sold 1,240 of its treasury shares at $30 cash per share. Sold 1,550 of its treasury shares at $20 cash per share. Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record Oct. 22 Paid the dividend declared on September 9 Dec. 31 Closed the $53,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required 1. Prepare journal entries to record each of these transactions for 2016. View transaction list Journal entry worksheet 123 4 5 67 8 Record the purchase 3,100 shares of its own common stock for $25 cash per share Note: Enter debits before credits. Date General Journal Debit Credit Jan 02

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit Jan, 02 Treasurry Stock (3100 Shares X $ 25) $                  77,500      To Cash $                     77,500 (To Record the purchase of treasury Stock) Retained Earnings $                  41,850 Jan, 07       To Dividend Payablle $                     41,850 Total Shares outstanding =                       31,000 Shares Less: Treasurry stock                         3,100 net outstanding stock                       27,900 Dividend per shares                              1.5 Total Dividend =                       41,850 Feb, 28 Dividend Payable $                  41,850      To Cash $                     41,850 Cash (1240 Shares X $ 30) $                  37,200 July, 09        To treasurry stock $                     31,000        To Excess paid in capital - Common stock $                       6,200 Cash (1550 Shares X $ 20) $                  31,000 Excess paid in capital - Common stock $                     7,750 Aug ,27        To treasurry stock $                     38,750 Retained Earnings $                  61,380 Sept, 09       To Dividend Payablle $                     61,380 Total Shares outstanding =                       31,000 Shares Less: Treasurry stock                         3,100 Shares Add: Sales of Treasurry Stock                         1,240 Shares Add: Sales of Treasurry Stock                         1,550 Shares net outstanding stock                       30,690 Shares Dividend per shares                              2.0 Per shares Total Dividend =                       61,380 Oct, 22 Dividend Payable $                  61,380      To Cash $                     61,380 Revenue Account $                  53,000 Dec, 31     To Retained earnings $                     53,000

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