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Entries for Selected Corporate Transactions Morrow Enterprises Inc

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Entries for Selected Corporate Transactions Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 2045, are as follows: Common Stock, $10 stated value (550,000 shares authorized, 360,000 shares issued) $3,600,000 Paid-In Capital in Excess of Stated Value-Common Stock 700,000 Retained Earnings 8,170,000 Treasury Stock (36,000 shares, at a cost of $14 per share) 504,000 The following selected transactions occurred during the year: Jan. 22. Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December of the preceding fiscal year for $38,880. Apr. 10. Issued 70,000 shares of common stock for $16 per share. June 6. Sold all of the treasury stock for $612,000. July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share. Aug. 15. Issued the certificates for the dividend declared on July 5. Nov. 23. Purchased 23,000 shares of treasury stock for $437,000. Dec. 28. Declared a $0.15-per-share dividend on common stock. 31. Closed the two dividends accounts to Retained Earnings. Required: Required: 1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. Common Stock Jan. 1 Bal. Apr. 10 3,600,000 700,000 282, 240 x Aug. 15 Dec. 31 Bal. Paid-In Capital in Excess of Stated Value-Common Stock Jan. 1 Bal. 700,000 Apr. 10 July 5 Dec. 31 Bal. Retained Earnings Dec. 31 Than 1 Ral 170 nnn Retained Earnings Dec. 31 Jan. 1 Bal. 8,170,000 Dec. 31 Dec. 31 Bal. Treasury Stock Jan. 1 Bal. 504,000 504,000 June 6 437,000 Nov. 23 Dec. 31 Bal. 437,000 Paid-In Capital from Sale of Treasury Stock June 6 612,000 x Stock Dividends Distributable 201,600 x July 5 Aug. 15 201,600 x Stock Dividends Distributable 201,600 x July 5 Aug. 15 201,600 x Stock Dividends 201,600 x Dec. 31 July 5 504,000 x Cash Dividends Dec. 28 Dec. 31 2. Journalize the entries to record the transactions. If an amount box does not require an entry, leave it blank. Jan. 22. Paid cash dividends of $0.12 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $38,880. Date Debit Credit Account Cash Dividends Payable Jan. 22 38,880 Cash 38,880 Apr. 10. Issued 70,000 shares of common stock for $16. Date Account Debit Credit Apr. 10 Cash 1,120,000 Common Stock 700,000 Paid-In Capital in Excess of Stated Value-Common Stock 420,000 June 6. Sold all of the treasury stock for $612,000. Date Account Debit Credit June 6 Cash 612,000 Treasury Stock Paid-In Capital from Sale of Treasury Stock July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share. Date Account Debit Credit July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share. Date Account Debit Credit July 5 Stock Dividends 309,600 Stock Dividends Distributable Paid-In Capital in Excess of Stated Value-Common Stock Aug. 15. Issued the certificates for the dividend declared on July 5. Date Account Debit Credit Aug. 15 Stock Dividends Distributable Common Stock Nov. 23. Purchased 23,000 shares of treasury stock for $437,000. Nov. 23. Purchased 23,000 shares of treasury stock for $437,000. Date Account Debit Credit Nov. 23 Treasury Stock 437,000 Cash 437,000 Dec. 28. Declared a $0.15-per-share dividend on common stock. Date Account Debit Credit Dec. 28 Cash Dividends Cash Dividends Payable Dec. 31. Closed the two dividends accounts to Retained Earnings. Date Account Debit Credit Dec. 31 Retained Earnings Stock Dividends Cash Dividends 3. Prepare a retained earnings statement for the year ended December 31, 2045. Assume that Morrow Enterprises Inc. had net income for the year ended December 31, 2045, of $8,497,000. Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 2015 Retained Earnings, January 1, 2015 Net Income Dividends: Cash Dividends Stock Dividends Increase in Retained Earnings Retained Earnings, December 31, 2015 4. Prepare the Stockholders' Equity section of the December 31, 2045, balance sheet. Morrow Enterprises Inc. Stockholders' Equity As of December 31, 2015 4. Prepare the Stockholders' Equity section of the December 31, 2045, balance sheet. Morrow Enterprises Inc. Stockholders' Equity As of December 31, 2015 Paid-In-Capital: Common Stock, $10 Stated Value Excess of Stated Value-Common Stock Paid-In Capital, Common Stock From Sale of Treasury Stock Total Paid-In Capital $ Retained Earnings Treasury Stock (at Cost) Total Stockholders' Equity Feedback Check My Work 1 & 2 The purchase of treasury stock is typically recorded using the cost method. When the company resells shares of treasury stock pay attention to the nice these shares are being sold for and the price originally paid to reacquire these shares on the date of