Common Stock, $20 stated value(500,000 shares authorized, 375,000 shares issued)
Paid-In Capital in Excess of StatedValueâCommon Stock
Treasury Stock (25,000 shares, atcost)
The following selected transactions occurred during theyear:
Paid cash dividends of $0.08 pershare on the common stock. The dividend had been properly recordedwhen declared on December 1 of the preceding fiscal year for$28,000.
Issued 75,000 shares of commonstock for $24 per share.
Sold all of the treasury stock for$26 per share.
Declared a 4% stock dividend oncommon stock, to be capitalized at the market price of the stock,which is $25 per share.
Issued the certificates for thedividend declared on July 5.
Purchased 30,000 shares of treasurystock for $19 per share.
Declared a $0.10-per-share dividendon common stock.
Closed the credit balance of theincome summary account, $1,125,000.
Closed the two dividends accountsto Retained Earnings.
Enter the January 1 balances inT accounts for the stockholdersâ equity accounts listed.
Journalize the entries torecord the transactions, and post to the eight selected accounts.No post ref is required in the journal. Refer to the Chart ofAccounts for exact wording of account titles.
Prepare a retained earningsstatement for the year ended December 31, 2016. Enter all amountsas positive numbers. The word âLessâ is not required.*
Prepare the StockholdersâEquity section of the December 31, 2016, balance sheet. âLessâ orâDeductâ will automatically appear if it is required. *
* Refer to the list of Amount Descriptions provided for theexact wording of the answer choices for text entries2.
2.CHART OF ACCOUNTSMorrow Enterprises Inc.General Ledger
Cash Dividends Payable
Stock Dividends Distributable
Mortgage Note Payable
Paid-In Capital in Excess of StatedValue-Common Stock
Paid-In Capital in Excess ofPar-Preferred Stock
Paid-In Capital from Sale ofTreasury Stock
Cost of Merchandise Sold
Credit Card Expense
Office Supplies Expense
Cash balance, July 31, 2016
Common stock, $20 stated value;500,000 shares authorized, 375,000 issued
Common stock, $20 stated value;500,000 shares authorized, 438,000 issued
Common stock, $20 stated value;500,000 shares authorized, 468,000 issued
Decrease in retained earnings
Excess of issue price over statedvalue
For the Year Ended December 31,2016
From sale of treasury stock
Increase in retained earnings
Retained earnings, December 31,2016
Retained earnings, January 1,2016
Total paid-in capital
Total stockholdersâ equity
4. T Accounts:
A. Enter the January 1 balances in T accounts for thestockholdersâ equity accounts listed. Post the journal entries frompart B to the eight selected accounts. No post ref is required inthe journal.
Paid-In Capital inExcess of Stated Value-Common Stock
Paid-In Capital fromSale of Treasury Stock
B. Journalize the entries to record the transactions. No postref is required in the journal. Refer to the Chart of Accounts forexact wording of account titles.
6.Retained Earning Statements
C. Prepare a retained earnings statement for the year endedDecember 31, 2016. Enter all amounts as positive numbers. The wordâLessâ is not required. Refer to the list of Amount Descriptionsprovided for the exact wording of the answer choices for textentries.
Retained Earnings Statement
For the Year Ended December 31, 2016
7. Stockholdersâ Equity
D. Prepare the Stockholdersâ Equity section of the December 31,2016 balance sheet. âLessâ or âDeductâ will automatically appear ifit is required. Refer to the list of Amount Descriptions providedfor the exact wording of the answer choices for text entries.