PR 13-4A Entries for selected corporate transactions Tolbert Enterprises Inc. ma

Question

PR 13-4A Entries for selected corporate transactions Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity a OBJ. 3, 4, 5,6 of Tolbert Enterprises Inc., with balances on January 1, 2012, are as follows: $4,000,000 750,000 ....9,150,000 4. Total stockholders' equity, $15,599,960 Common Stock, $10 stated value (600,000 shares Paid-In Capital in Excess of Stated Value Treasury Stock (40,000 shares, at cost) GL The following selected transactions occurred during the year: Jan. 4. Paid cash dividends of $0.13 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $46,800. Apr. 3. Issued 75,000 shares of common stock for $1,200,000. June 6. Sold all of the treasury stock for $725,000. July 1, Declared a 4% stock dividend on common stock, to be capitalized at the mar- ket price of the stock, which is $18 per share. Aug. 15. Issued the certificates for the dividend declared on July 1. Nov. 10. Purchased 25,000 shares of treasury stock for $500,000. Dec. 27. Declared a $0.16-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, S 31. Closed the two dividends accounts to Retained Earnings. 950,000 Instructions 1. Enter the January 1 balances in T accounts for the stockholders' equity accounts s listed sury Stock Also prepare T accounts for the following: Paid-In Capital from Sale of fr Stock Dividends Distributable; Stock Dividends; Cash Dividends. 2. Journalize the entries to record the transactions, and post to the eight accounts

Explanation / Answer

04-Jan Dividend payable    46800                     Cash 46800 03-Apr Cash 1200000           Common stock 750000           Paid in capital in excess of stated value 450000 06-Jun Cash 725000            Treasury stock 600000            Paid in capital in excess of treasury stock 125000 01-Jul Stock dividends 342000 (475000*4%*18)             Dividend payable 15-Aug Dividend payable              Common stock 190000 (19000*10)           Paid in capital in excess of stated value 152000 (19000*8) 10-Nov Treasury stock 500000            Cash 500000 27-Dec Cash Dividend 75040 (469000*.16)            Dividend payable 75040 31-Dec Income summary 950000           Retained earnings 950000 31-Dec Retained earnings 417040            Stock dividends 342000            Cash dividends 75040 Retained earnings statement Retained earnings (1 january 2012) 9150000 Net income 950000 Less Cash dividend -75040 Stock dividend -342000 Increase in retained earnings 532960 Retained earnings (31 december 2012) 9682960 Stockholders equity Paid in capital Common stock $10 stated value 4940000 Paid in capital in excess of stated value 1352000 Paid in capital in excess of Treasury stock 125000 Total paid in capital 6417000 Retained earnings 9682960 Total 16099960 Less Treasury stock 500000 Total stockholders equity 15599960

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