provide the answer to the red x’s and what numbers you used to get that answer. you. I will submi Transcribed Image Text: Stockholders’ Equity: Transactions and Statement
The stockholders’ equity section of Night Corporation’s balance sheet at January 1 follows:
Common stock, $8 par value, 300,000 shares authorized, 60,000 shares
480,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value
720,000
From treasury stock
45,000
765,000
Retained earnings
522,000
1,767,000
Less: Treasury stock (6,000 shares) at cost
207.000
Total Stockholdersâ€TM Equity
1,560,000
The following transactions affecting stockholders’ equity occurred during the year:
Jan.
8 Issued 15,000 shares of previously unissued common stock for $31 cash per share.
Mar. 12 Sold all of the treasury shares for $42 cash per share.
June 30 Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $37 per share.
July 10 Issued the stock dividend declared on June 30.
Oct. 7 Acquired 2,500 shares of common stock as treasury stock at $39 cash per share.
Dec. 18 Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31.
Required
a. Prepare journal entries to record the foregoing transactions.
b. Prepare a statement of stockholders†equity. Net income for the year is $511,500.
General Journal
Date
Description
Debit
Credit
Jan.8
Cash
465,000 v $
Common Stock
120,000 v
Paid-in-Capital in Excess of Par Value
345,000 v
Issued shares of common stock.
Mar.12 Cash
252,000 v
Treasury Stock
Paid-in-Capital from Treasury Stock
207,000 v
45,000 v
Sold shares of treasury stock.
Jun.30 Stock Dividends
138,750 v
Stock Dividend Distributable
Paid-in-Capital in Excess of Par Value
Declared stock dividend.
Jul.10 Stock Dividend Distributable
0 x
Common Stock
Issued shares of common stock declared as dividend.
Oct.7
Treasury Stock
97,500 v
Cash
97,500 v
Purchased shares of common stock for treasury.
Dec. 18 Retained earnings
0 x
Dividends Payable
Declared cash dividend.
Dec.31 Income Summary
511,500 v
Retained earnings
511,500 v
To close the income summary account.
Dec.31 Retained earnings
0 x
Stock dividends
Cash Dividends
To close the dividend accounts.
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