Horton Company began business on January 1, 2014 by issuing all of its 1,150,000

Question

Horton Company began business on January 1, 2014 by issuing all of its 1,150,000 authorized shares of its $1 par value common stock for $22 per share. On June 30, they declared a cash dividend of $1.50 per share to stockholders of record on July 31. They paid the cash dividend on August 30. On November 1, Horton reacquired 230,000 of its own shares of stock for $27 per share. On December 22 they resold half of these shares for $33 per share. a. Prepare all of the necessary journal entries to record the events described above. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Record the issue of 1,150,000 authorized shares of $1 par value for $22 per share. 2.Record the declaration of the cash dividends of $1.50 per share. 3.Record the payment of the cash dividends of $1.50 per share. 4.Record the repurchase of 230,000 shares for $27 per share. 5.Record the reissue of 115,000 share for 33 per share. b. Prepare the Stockholders' Equity section of the Balance sheet as of 12/31/2014 assuming that the Net Income for the year was $4,000,000.

Explanation / Answer

Date Account Titles Debit Credit $ $ January 1, 2014 Cash 25,300,000 Common stock 1,150,000 Paid-in capital in excess of par 24,150,000 June 30, 2014 Retained earnings 1,725,000 Dividends payable 1,725,000 August 30 Dividends payable 1,725,000 Cash 1,725,000 November 1, 2014 Treasury Stock 6,210,000 Cash 6,210,000 December 22 Cash 3,795,000 Treasury stock 3,105,000 Additional paid-in capital from sale of treasury stock 690,000

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