The stockholders’ equity accounts of Miley Corporation on January 1, 2014, were
ID: 2477138 • Letter: T
Question
The stockholders’ equity accounts of Miley Corporation on January 1, 2014, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,400 shares authorized) $324,000
Common Stock ($4 stated value, 334,500 shares authorized) 1,070,400
Paid-in Capital in Excess of Par Value—Preferred Stock 16,200
Paid-in Capital in Excess of Stated Value—Common Stock 267,600
Retained Earnings 684,900
Treasury Stock—(5,400 common shares) 43,200
During 2014, the corporation had the following transactions and events pertaining to its stockholders’ equity.
Feb. 1 Issued 5,000 shares of common stock for $30,000.
Mar. 20 Purchased 1,690 additional shares of common treasury stock at $8 per share.
Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1.
Nov. 1 Paid the dividend declared on October 1.
Dec. 1 Declared a $0.40 per share cash dividend to common stockholders of record on December 15, payable December 31, 2014.
Dec. 31 Determined that net income for the year was $284,400. Paid the dividend declared on December 1.
Journalize the transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Mar. 20
Oct. 1
Nov. 1
Dec. 1
Dec. 31
(To record net income)
(To close cash dividends)
(To record payment of cash dividends payable)
Date
Account Titles and Explanation
Debit
Credit
Feb. 1
Mar. 20
Oct. 1
Nov. 1
Dec. 1
Dec. 31
Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31 Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31 Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31 Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31(To record net income)
Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31(To close cash dividends)
Feb. 1Mar. 20Oct. 1Nov. 1Dec. 1Dec. 31(To record payment of cash dividends payable)
Explanation / Answer
Miley Corporation Journal Entry Date Account Title Dr $ Cr$ Feb 1. Cash 30,000 Common Stock 20,000 Paid-in-Capital in excess of Stated value-Common Stock 10,000 (issue of common stock 5000 at $2 premium) Mar 20. Treasury Stock 13,520 Cash 13,520 (purchase of 1690 treasury stock @$8 each) Oct 1. Cash Dividend -Preferred shares 25,920 Dividend Payable -Preference share 25,920 (preference dividend 8% declared ) Nov 1. Dividend Payable -Preference share 25,920 Cash 25,920 (prference dividend declared paid) Dec1. Cash Dividend -Common Stock 106,204 Dividend Payable -Common Stock 106,204 (Cash dividend @$0.40 per share for 265,510 outstanding shares declared) Dec 31. Dividend Payable -Common Stock 106,204 Cash 106,204 (declared cash dividend paid) Dec 31. Cash Dividend -Preferred shares 25,920 Cash Dividend -Common Stock 106,204 Retained Earning 132,124 ( cash dividends closed in retained earning) Dec 31. Retained earning 284,400 Income Statement 284,400
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