Stockholders’ Equity: Transactions and Statement The stockholders’ equity sectio

Question

Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January 1 follows: Common stock, $5 par value, 300,000 shares authorized, 60,000 shares $300,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value $480,000 From treasury stock 30,000 510,000 Retained earnings 348,000 1,158,000 Less: Treasury stock (6,000 shares) at cost 138,000 Total Stockholders’ Equity $1,020,000 The following transactions affecting stockholders’ equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock for $21 cash per share. Mar. 12 Sold all of the treasury shares for $28 cash per share. June 30 Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $25 per share. July 10 Issued the stock dividend declared on June 30. Oct. 7 Acquired 2,500 shares of common stock as treasury stock at $26 cash per share. Dec. 18 Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31. Required a. Prepare journal entries to record the foregoing transactions. General Journal Date Description Debit Credit Jan.8 Answer $Answer $Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Issued shares of common stock. Mar.12 Answer Answer Answer Answer Answer Answer Paid-in-Capital from Treasury Stock Answer Answer Sold shares of treasury stock. Jun.30 Answer Answer Answer Answer Answer Answer Paid-in-Capital in Excess of Par Value Answer Answer Declared stock dividend. Jul.10 Answer Answer Answer Answer Answer Answer Issued shares of common stock declared as dividend. Oct.7 Answer Answer Answer Answer Answer Answer Purchased shares of common stock for treasury. Dec.18 Answer Answer Answer Answer Answer Answer Declared cash dividend. Dec.31 Answer Answer Answer Answer Answer Answer To close the income summary account. Dec.31 Answer Answer Answer Stock dividends Answer Answer Answer Answer Answer To close the dividend accounts. b. Prepare a statement of stockholders’ equity. Net income for the year is $341,000. Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances). Night Corporation Statement of Stockholders' Equity For Year Ended December 31 Common Stock Paid-in-Capital in Excess of Par Paid-in-Capital from Treasury Stock Retained Earnings Treasury Stock Total Balance, January 1 $Answer $Answer $Answer $Answer $Answer $Answer Answer Common shares issued Answer Answer Answer Answer Answer Answer Answer Treasury shares sold Answer Answer Answer Answer Answer Answer Stock Dividends Issued Answer Answer Answer Answer Answer Answer Answer Treasury shares acquired Answer Answer Answer Answer Answer Answer Cash Dividends Declared Answer Answer Answer Answer Answer Answer Net Income Answer Answer Answer Answer Answer Answer Balance, December 31 $Answer $Answer $Answer $Answer $Answer $Answer

Explanation / Answer

In the books of Night Corporation:

b. Night Corporation :

Balance Sheet ( Partial)

December 31

Date General Journal Debit Credit $ $ Jan 8 Cash 315,000 Common Stock 75,000 Additional Paid-in Capital in Excess of Par Value: Common Stock 240,000 Mar12 Cash 168,000 Treasury Stock 138,000 Paid-in Capital : Treasury Stock 30,000 June 30 Retained Earnings ( 60,000 + 15,000) shares x 5% x $ 25 93,750 Common Stock Dividend Distributable 18,750 Additional Paid-in Capital in Excess of Par : Common Stock 75,000 July 10 Common Stock Dividend Distributable 18,750 Common Stock 18,750 Oct 7 Treasury Stock 65,000 Cash 65,000 Dec 18 Retained Earnings 76,250 Dividends Payable : Common Stock 76,250 Dec 31 Income Summary 341,000 Retained Earnings 341,000

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