Morrow Enterprises Inc. manufactures bathroom fixtures. Thestockholdersâ equity ac- counts of Morrow Enterprises Inc., withbalances on January 1, 2016, are as follows:
Common Stock, $20 stated value (500,000 shares authorized,375,000 shares issued) . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
Paid-In Capital in Excess of Stated ValueâCommon Stock . . . . .. . . . . . . Retained Earnings . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Treasury Stock (25,000 shares, at cost) . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .
The following selected transactions occurred during theyear:
$ 7,500,000 825,000 33,600,000 450,000
Jan. 22.
Apr. 10. June 6. July 5.
Aug. 15. Nov. 23. Dec. 28.
Paid cash dividends of $0.08 per share on the common stock. Thedividend had been properly recorded when declared on December 1 ofthe preceding fiscal year for $28,000.
Issued 75,000 shares of common stock for $24 per share. Sold allof the treasury stock for $26 per share.
Declared a 4% stock dividend on common stock, to be capitalizedat the mar- ket price of the stock, which is $25 per share.
Issued the certificates for the dividend declared on July 5.Purchased 30,000 shares of treasury stock for $19 per share.Declared a $0.10-per-share dividend on common stock.
31. Closed the credit balance of the income summary account,$1,125,000. 31. Closed the two dividends accounts to RetainedEarnings
Instructions
1. Enter the January 1 balances in T accounts for thestockholdersâ equity accounts listed. Also prepare T accounts forthe following: Paid-In Capital from Sale of Treasury Stock; StockDividends Distributable; Stock Dividends; Cash Dividends.
2. Journalize the entries to record the transactions, and postto the eight selected accounts. 3. Prepare a retained earningsstatement for the year ended December 31, 2016. 4. Prepare theStockholdersâ Equity section of the December 31, 2016, balancesheet.
Morrow Enterprises Inc. manufactures bathroom fixtures. Thestockholdersâ equity ac- counts of Morrow Enterprises Inc., withbalances on January 1, 2016, are as follows:
Common Stock, $20 stated value (500,000 shares authorized,375,000 shares issued) . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
Paid-In Capital in Excess of Stated ValueâCommon Stock . . . . .. . . . . . . Retained Earnings . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Treasury Stock (25,000 shares, at cost) . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .
The following selected transactions occurred during theyear:
$ 7,500,000 825,000 33,600,000 450,000
Jan. 22.
Apr. 10. June 6. July 5.
Aug. 15. Nov. 23. Dec. 28.
Paid cash dividends of $0.08 per share on the common stock. Thedividend had been properly recorded when declared on December 1 ofthe preceding fiscal year for $28,000.
Issued 75,000 shares of common stock for $24 per share. Sold allof the treasury stock for $26 per share.
Declared a 4% stock dividend on common stock, to be capitalizedat the mar- ket price of the stock, which is $25 per share.
Issued the certificates for the dividend declared on July 5.Purchased 30,000 shares of treasury stock for $19 per share.Declared a $0.10-per-share dividend on common stock.
31. Closed the credit balance of the income summary account,$1,125,000. 31. Closed the two dividends accounts to RetainedEarnings
Instructions
1. Enter the January 1 balances in T accounts for thestockholdersâ equity accounts listed. Also prepare T accounts forthe following: Paid-In Capital from Sale of Treasury Stock; StockDividends Distributable; Stock Dividends; Cash Dividends.
2. Journalize the entries to record the transactions, and postto the eight selected accounts. 3. Prepare a retained earningsstatement for the year ended December 31, 2016. 4. Prepare theStockholdersâ Equity section of the December 31, 2016, balancesheet.
Related questions
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholdersâ equity accounts of Morrow Enterprises Inc., with balances on January 1, 2016, are as follows:
| Common stock, $20 stated value; 500,000 shares authorized, 399,000 issued | $7,980,000 |
| Paid-In Capital in Excess of Stated ValueâCommon Stock | 877,800 |
| Retained Earnings | 34,554,000 |
| Treasury Stock (22,500 shares, at cost) | 382,500 |
The following selected transactions occurred during the year:
| Jan. | 22 | Paid cash dividends of $0.07 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $26,355. |
| Apr. | 10 | Issued 73,000 shares of common stock for $23 per share. |
| Jun. | 6 | Sold all of the treasury stock for $26 per share. |
| Jul. | 5 | Declared a 2% stock dividend on common stock, to be capitalized at the market price of the stock, which is $24 per share. |
| Aug. | 15 | Issued the certificates for the dividend declared on July 5. |
| Nov. | 23 | Purchased 30,000 shares of treasury stock for $20 per share. |
| Dec. | 28 | Declared a $0.09-per-share dividend on common stock. |
| 31 | Closed the credit balance of the income summary account, $1,162,500. | |
| 31 | Closed the two dividends accounts to Retained Earnings. |
| Required: | |
| A. | Enter the January 1 balances in T accounts for the stockholdersâ equity accounts listed. |
