At September 30, the end of Beijing Company’s third quarter, the following stock

Question

At September 30, the end of Beijing Company’s third quarter, the following stockholders’ equity accounts are reported. Common stock, $12 par value $ 360,000 Paid-in capital in excess of par value, common stock 90,000 Retained earnings 400,000 In the fourth quarter, the following entries related to its equity are recorded: Date General Journal Debit Credit Oct. 2 Retained Earnings 70,000 Common Dividend Payable 70,000 Oct. 25 Common Dividend Payable 70,000 Cash 70,000 Oct. 31 Retained Earnings 95,000 Common Stock Dividend Distributable 46,000 Paid-In Capital in Excess of Par Value, Common Stock 49,000 Nov. 5 Common Stock Dividend Distributable 46,000 Common Stock, $12 Par Value 46,000 Dec. 1 Memo—Change the title of the common stock account to reflect the new par value of $4. Dec. 31 Income Summary 290,000 Retained Earnings 290,000 Required: 2. Complete the following table showing the equity account balances at each indicated date.

Explanation / Answer

Calculations and explanations:

1. Retained earnings on November 5 = 360,000+46,000 = 406,000

2. Paid in capital on Oct 31 = 90,000+49,000 = 139,000

3. Retained earnings on Oct 2 = 400,000-70,000 = 330,000

4. Retained earnings on Oct 31 = 330,000 - 95,000 = 235,000

5. Retained earnings on dec 31 = 235,000+290,000

6. Total equity = common stock+dividend distributable+paid-in capital+retained earnings

Oct 2 Oct 25 Oct 31 Nov 5 Dec 1 Dec 31 Common Stock 360,000.00 360,000.00 360,000.00 406,000.00 406,000.00 406,000.00 Common stock dividend distributable 0.00 0.00 46,000.00 0.00 0.00 0.00 Paid-in capital in excess of par, Common stock 90,000.00 90,000.00 139,000.00 139,000.00 139,000.00 139,000.00 Retained earnings 330,000.00 330,000.00 235,000.00 235,000.00 235,000.00 525,000.00 Total equity 780,000.00 780,000.00 780,000.00 780,000.00 780,000.00 1,070,000.00

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