Houghton Company began business on January 1, 2015 by issuingall of its 1,300,000 authorized shares of its $2 par value commonstock for $25 per share. On June 30, Houghton declared a cashdividend of $2.25 per share to stockholders of record on July 31.Houghton paid the cash dividend on August 30. On November 1,Houghton reacquired 260,000 of its own shares of stock for $30 pershare. On December 22, Houghton resold 130,000 of these shares for$36 per share.
Required:
a. Prepare all of the necessary journal entries to record theevents described above.
1. Record the issue of 1,300,000 authorized shares of $2 parvalue for $25 per share.
2. Record the declaration of the cash dividends of $2.25 pershare.
3. Record the payment of the cash dividends of $2.25 pershare.
4. Record the repurchase of 260,000 shares for $30 pershare.
5. Record the reissue of 130,000 share for 36 per share.
b.
Prepare the stockholders' equity section of the balance sheet asof December 31, 2015 assuming that the net income for the year was$5,500,000.
HOUGHTON COMPANY Stockholdersâ Equity Balance Sheet as of 12/31/2015 0 TotalStockholders' Equilty
| Houghton Company began business on January 1, 2015 by issuingall of its 1,300,000 authorized shares of its $2 par value commonstock for $25 per share. On June 30, Houghton declared a cashdividend of $2.25 per share to stockholders of record on July 31.Houghton paid the cash dividend on August 30. On November 1,Houghton reacquired 260,000 of its own shares of stock for $30 pershare. On December 22, Houghton resold 130,000 of these shares for$36 per share. Required:
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