On Dec. 29, 2014 issue 50 shares of $1 par common stock at $100 per share. Recor

Question

On Dec. 29, 2014 issue 50 shares of $1 par common stock at $100 per share. Record journal entry. Show T-accounts. Declare a $10,000 dividend on Dec. 31, 2014 to be paid on March 15, 2015. to stockholders of record as of Jan. 30, 2015. Record journal entry for declaration of dividend. Show T-accounts. Purchase 20 shares of Treasury Stock @ $85.00 a share on Dec. 31, 2014. Record journal entry for purchase of stock. Show T-accounts. Prepare a partial Balance Sheet on Dec. 31, 2014, showing Stockholders' Equity section.

Explanation / Answer

29, dec 2014

Cash account debit              5,000

      To common stock                     5,000

( for 50 common stock issued at $100 value)

31 dec 2014

Retained earnings account debit            10,000

             To dividend payable                  10,000

( For $10,000 dividend declared)

31 dec 2014

Treasury stock account debit                    1,700

                         To cash                                            1,700

( for treasury stock repurchased for $ 85 or 20 shares)

Balance sheet as on 31 Dec Paid in capital Common stock                500 Additional paid in capital          49,500 Additiona capital issued            5,000 Retained earnings          21,000 Total          76,000 Less dividend declared       (10,000) Less treasury stock bought          (1,700) Total share holders equity          64,300

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