The balance sheet of Entertainment, Inc., at December 31, 2015, reported 400,000

Question

The balance sheet of Entertainment, Inc., at December 31, 2015, reported 400,000 shares of $1 par common stock authonized with 110,000 shares issuod and outstandng Paid-in capital in excess of par--common had a balance of $305,000 Retained earnings had a balance of 5108,000. During 2016, the company completed the following selected transactions (Click the icon to view the transactions) Requirements Record the transactions in the joumal Explanations are not required 2. Prepare the stockholders equity section of the balance sheet at December 31, 2016, assuming the company eamed S74,000 of net incone during the year ep 28 eclared and distributed a 10% stock dividend on the 107,000 shares of cu standing common stock The market value of Entrtam ents common stock was S7 per share Journal Entry Date Accounts Debit Credit Sep 28 Retained eamings 74,900 Common stock 10,700 Pad-in capital in excess of par.common 64,200 Requirement 2. Prepare the stoc kholders' equity section of the balance sheet at December 31, 2016, assuming the company earned $74,000 of net income during the year (Enter the accounts in the proper order for the stockholders' equaty section of the balance sheet.) Stockholders Equity Pad-in capital More Into Common stock, $1 par 400,000 shares authorized shares issued shares oustanding Paid-in capital in excess of par-common Paid-n capital from treasury stock Feb 15 Purchased 9,000 shares of the treasury stock at 53 per share Ma 8 Sold 6,000 shares of treasury stoc k for 57 per share Sep 28 Declared ad d stributed a 10% seek dindend on the 107 000 shares of outstanding Total paid-in capital common stock. The market value of Entertainment's common stock was $7 per share Retained earnings Less: Treasury stock Total stockholders'equity shares at cost Print Done

Explanation / Answer

Stockholders' equity Common stock $1 par 400000 authorised 117700 shares issued 117700 Shares outstanding 117700 Paid in capital inexces of par - Common stock 369200 Paid in capital from treasury stock 36000 Total paid up capital 522900 Retained earnings Beginning balance 108000 Less: Stock dividend -74900 Add: Net income 74000 Ending balance 107100 Less: Treasury stock 3000 shares at cost -9000 Total stockholders equity 621000 Workings: No.of Par value Treasury stock APIC Retained shares at cost Earnings 1/1/2015 Beginning common stock 110000 110000 305000 108000 Feb.15 Treasury stock purchased -9000 -9000 -27000 Shares outstanding 101000 101000 -27000 305000 108000 Mar.8 Treasury stock reissued 6000 6000 18000 36000 107000 107000 -9000 341000 108000 Sep.28 Stock dividend 10700 10700 64200 -74900 Share after stock dividend 117700 117700 -9000 405200 33100 Dec.31 Net income for the year 74000 Dec.31 Ending balances 117700 117700 -9000 405200 107100

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