Help Save & E Common stock-S1d par value, 140,000 shares authorized, 60,000 shar

Question

Help Save & E Common stock-S1d par value, 140,000 shares authorized, 60,000 shares issued and outstanding Paid-in capital in excess of par value, common Retained earnings Total stockholders' equity 5 600,000 90,000 500, 000 1,190, 000 tock In year 2017, the following transactions affected its stockholders' equity accounts Jan- Jan. 1 purchased 6,000 -hres of its own stock at $23 cash per hare . 5 Directors declared a2 per share cash dividend payable on February 28 to the February 5 stockholdera of record. Feb. 28 Paid the dividend declared on January 5 July 6 Sold 2.300 of ita treasury shares at $27 cash per share. Aug. 22 sold 3,700 of its treasury shares at $20 cash per shara. Sept. s Directors declared a $2 per ahare cash dividend payable on october 28 to tho Beptenber 25 stockholders of record. oct. 28 Paid the dividand declared on Saptenber s. Dec. 31 closed the $128, 500 credit balance (from net incoas in the Incane Surmazy account to Retained Earnings. Nex Py 1 of 1 rch

Explanation / Answer

Note: On sale of 3700 treasury stock at $20, the difference of $11100 [3700 x ($23 - $20)] is debited to Paid-in capital-Treasury stock to the extent of balance available $9200. The remaining amount of $1900 ($11100 - $9200) is debited to the retained earnings.

Date Account Titles and Explanation Debit Credit Jan. 1 Treasury stock (6000 x $23) 138000 Cash 138000 (To record purchase of treasury stock) Jan. 5 Retained earnings 108000 Dividend payable [$2 x (60000 - 6000)] 108000 (To record declaration of cash dividend) Feb. 28 Dividend payable 108000 Cash 108000 (To record payment of cash dividend) Jul. 6 Cash (2300 x $27) 62100 Treasury stock (2300 x $23) 52900 Paid-in capital-Treasury stock (2300 x $4) 9200 (To record sale of treasury stock) Aug. 22 Cash (3700 x $20) 74000 Paid-in capital-Treasury stock 9200 Retained earnings [(3700 x $3) - 9200] 1900 Treasury stock (3700 x $23) 85100 (To record sale of treasury stock) Sep. 5 Retained earnings 120000 Dividend payable [$2 x (60000-6000+2300+3700)] 120000 (To record declaration of cash dividend) Oct. 28 Dividend payable 120000 Cash 120000 (To record payment of cash dividend) Dec. 31 Income summary 128500 Retained earnings 128500 (To close net income to retained earnings)

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