11-9 Recording and Reporting Stockholders Equity Transactions, Including Closing
ID: 2536819 • Letter: 1
Question
11-9 Recording and Reporting Stockholders Equity Transactions, Including Closing Entry [LO 11-2, LO 11-3]
Paid the dividends in (b).
[The following information applies to the questions displayed below.] The annual report for Malibu Beachwear reported the following transactions affecting stockholders’ equity: E11-9 Part 1 Required: 1. Indicate the effect (for increase, - for decrease, for increase/decrease) of each of these transactions on total assets, liabilities, and stockholders' equity. (Leave cell blank if there is no effect.) Assets Liabilities Stockholders Equity a. b. C. d. e.Explanation / Answer
Answers
Assets
Liabilities
Stockholder's Equity
a.
$ (3,50,000.00)
$ (3,50,000.00)
b.
$ 2,60,000.00
c.
$ (2,60,000.00)
$ (2,60,000.00)
d.
$ 2,00,000.00
$ 2,00,000.00
e.
$ (2,60,000.00)
transaction
General Journal
Debit
Credit
a.
Treasury Stock
$ 3,50,000.00
Cash
$ 3,50,000.00
(shares re acquired)
b.
Dividends
$ 2,60,000.00
Dividend payable
$ 2,60,000.00
(dividend declared)
c.
Dividend payable
$ 2,60,000.00
Cash
$ 2,60,000.00
(dividends paid)
d.
Cash
$ 2,00,000.00
Common Stock [100000 x $0.10]
$ 10,000.00
Additional capital in excess of par - Common Stock [100000 x $1.90]
$ 1,90,000.00
(common stock issued)
e.
Retained earnings
$ 2,60,000.00
Dividends
$ 2,60,000.00
(account closed)
Common Stock
Additional paid In Capital
retained earnings
Treasury Stock
Beginning
$ 12,500.00
$ 1,90,000.00
$ 1,50,000.00
$ -
Stock Issuance
$ 10,000.00
$ 1,90,000.00
Net Income
$ 2,70,000.00
Dividends: Common
$ (2,60,000.00)
Ending
$ 22,500.00
$ 3,80,000.00
$ 1,60,000.00
$ (3,50,000.00)
Assets
Liabilities
Stockholder's Equity
a.
$ (3,50,000.00)
$ (3,50,000.00)
b.
$ 2,60,000.00
c.
$ (2,60,000.00)
$ (2,60,000.00)
d.
$ 2,00,000.00
$ 2,00,000.00
e.
$ (2,60,000.00)
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