The January 1 balances have been entered in T accounts for the stockholders\' eq

Question

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.

. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 22. Paid cash dividends of $0.08 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,000.

3. Prepare a retained earnings statement for the year ended December 31, 2014.

4. Prepare the Stockholders' Equity section of the December 31, 2014, balance sheet.

Explanation / Answer

Morrow Enterprises Inc. Journal Entries Date Partcular Amount (DR) Amount(CR) 22-Jan Common stock dividend payable $           28,000.00       Cash $                                     28,000.00 10-Apr Cash A/c $     1,800,000.00     Common Stock $                               1,500,000.00     Additional Paid in capital $                                   300,000.00 6-Jun Cash A/c $        650,000.00     Treasury Stock $                                   450,000.00     Additional Paid in Capital $                                   200,000.00 5-Jul Stock Dividend $        450,000.00    Stock Dividend distributable $                                   360,000.00    Additional Paid in Capital $                                     90,000.00 15-Aug Stock Dividend distributable $        360,000.00     Common stock $                                   360,000.00 23-Nov Treasury Stock $        570,000.00      To Cash $                                   570,000.00 28-Dec Cash Dividend A/c $           43,800.00 Cash    Dividend Payable $                                     43,800.00 31-Dec Income Summary $     1,125,000.00     Retained Earning $                               1,125,000.00 31-Dec Retained Earning $        493,800.00    Stock Dividend $                                   450,000.00     Cash Dividend $                                     43,800.00 Morrow Enterprises Inc. Retained Earning Statement For the Period ended Dec 31,2014 Retained Earning Jan1 2014 $                             33,600,000.00 Net Income $     1,125,000.00 Less: Cash dividend $        (43,800.00) Less: stock Dividend $      (450,000.00) Increase in Retained Earning $                                   631,200.00 Retained Earning Dec 31,2014 $                             34,231,200.00 Morrow Enterprises Inc. Balance sheet December 31,2014 Stockholder's Equity Paid in capital Common stock,$20 stated value (500000 shares authorzed,468000 shares issued $     9,360,000.00 Excess of paid in capital $     1,415,000.00 Total Paid in capital $                             10,775,000.00 Retained Earning $                             34,231,200.00 Total $                             45,006,200.00 Less: treasury Stock $                                   570,000.00 Total Stockholder's Equity $                             44,436,200.00 Common Stock Particular Amount(DR) Particular Amount(CR) Balance C/d $     9,360,000.00 Balance b/d $ 7,500,000.00 Cash $ 1,500,000.00 Stock dividend distributable $     360,000.00 Total $     9,360,000.00 Total $ 9,360,000.00 Paid in Capital excess of par Particular Amount(DR) Particular Amount(CR) Balance C/d $     1,415,000.00 Balance B/d $     825,000.00 Cash $     300,000.00 Cash $     200,000.00 Stock dividend $        90,000.00 total Total $ 1,415,000.00

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