Anne Cleves Company reported the following amounts in the stockholders’ equity s

Question

Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2013, balance sheet.

During 2014, Cleves took part in the following transactions concerning stockholders’ equity.

(a) Prepare journal entries to record the transactions described above. (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.)

No.

Account Titles and Explanation

Debit

Credit

(b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $336,300. (Enter account name only .Do not provide any descriptive information.)

ANNE CLEVES COMPANY
Stockholders’ Equity
December 31, 2014

Preferred stock, 8%, $100 par (10,000 shares authorized, 2,120 shares issued) $212,000 Common stock, $5 par (120,750 shares authorized, 24,150 shares issued) 120,750 Additional paid-in capital 131,500 Retained earnings 456,600    Total $920,850

Explanation / Answer

(a) Prepare journal entries to record the transactions described above. (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.) No. Account Titles and Explanation Debit Credit 1 Dividend Preferred Stock A/c 16960 Dividend Common Stock A/c 72450 To Cash/Bank A/c 89410 2 Cash/Bank A/c 62400 To Additional Capital A/c 8000 To Retained Earnings A/c 54400 3 Land A/c 30690 To Additional Paid-in Capital A/c 6600 Treasury shares assumed to have a face value of $ 10 To Retained Earnings A/c 24090 4 Cash/Bank A/c 59360 To Additional Paid-in Capital A/c 56000 To Retained Earnings A/c 3360 5 No entry for declaration of dividend 6 Dividend Common Stock A/c 12875 To Cash/Bank A/c 12875 7 No entry for declaration of dividend (b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $336,300. (Enter account name only .Do not provide any descriptive information.) ANNE CLEVES COMPANY Stockholders’ Equity December 31, 2014 $ Preferred stock, 8%, $100 par (10,000 shares authorized, 2,680 shares issued)                                   2,68,000 Common stock, $5 par (120,750 shares authorized, 25,750 shares issued)                                   1,28,750 Additional paid-in capital                                   1,38,100 Retained earnings                                   7,72,465    Total                                13,07,315

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