Homework answers / question archive / Waterway Company has the following stockholders' equity accounts at December 31, 2020

Waterway Company has the following stockholders' equity accounts at December 31, 2020

Accounting

Share With

---

Waterway Company has the following stockholders' equity accounts at December 31, 2020.

 

Common Stock ($100 par value, authorized 7,900 shares) $490,800

Retained Earnings 273,600

 

 

 

Collapse question part

(a)

 

Correct answer. Your answer is correct.

   

Prepare entries in journal form to record the following transactions, which took place during 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

 

(1) 270 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.)

(2) A $22 per share cash dividend was declared.

(3) The dividend declared in (2) above was paid.

(4) The treasury shares purchased in (1) above were resold at $102 per share.

(5) 470 shares of outstanding stock were purchased at $104 per share.

(6) 320 of the shares purchased in (5) above were resold at $96 per share.

 

No.

Account Titles and Explanation

Debit

Credit

1.

Entry field with correct answer

Treasury Stock

Entry field with correct answer

26,190

Entry field with correct answer

Entry field with correct answer

cash

Entry field with correct answer

Entry field with correct answer

26,190

2.

Entry field with correct answer

Retained Earnings

Entry field with correct answer

102,036

Entry field with correct answer

Entry field with correct answer

Dividends Payable

Entry field with correct answer

Entry field with correct answer

102,036

3.

Entry field with correct answer

Dividends Payable

Entry field with correct answer

102,036

Entry field with correct answer

Entry field with correct answer

Cash

Entry field with correct answer

Entry field with correct answer

102,036

4.

Entry field with correct answer

Cash

Entry field with correct answer

27,540

Entry field with correct answer

Entry field with correct answer

Treasury Stock

Entry field with correct answer

Entry field with correct answer

26,190

Entry field with correct answer

Paid-in Capital from Treasury Stock

Entry field with correct answer

Entry field with correct answer

1,350

5.

Entry field with correct answer

Treasury Stock

Entry field with correct answer

48,880

Entry field with correct answer

Entry field with correct answer

Cash

Entry field with correct answer

Entry field with correct answer

48,880

6.

Entry field with correct answer

Cash

Entry field with correct answer

30,720

Entry field with correct answer

Entry field with correct answer

Paid-in Capital from Treasury Stock

Entry field with correct answer

1,350

Entry field with correct answer

Entry field with correct answer

Retained Earnings

Entry field with correct answer

1,210

Entry field with correct answer

Entry field with correct answer

Treasury Stock

Entry field with correct answer

Entry field with correct answer

33,280

 

 

 

 

Collapse question part

(b)

Prepare the stockholders' equity section of Waterway Company's balance sheet after giving effect to these transactions, assuming that the net income for 2021 was $92,600. State law requires restriction of retained earnings for the amount of treasury stock. (Enter account name only and do not provide descriptive information.)

 

WATERWAY COMPANY

Stockholders' Equity

 

 

 

$

 

 

 

   

 

 

 

: 

 

 

   

$