13-5 The stockholders’ equity of Sayers Company at January 1, 2011, is as follow
ID: 2587631 • Letter: 1
Question
13-5
The stockholders’ equity of Sayers Company at January 1, 2011, is as follows:
Common stock—no-par value, stated value of $20; 100,000 shares authorized, 60,000 shares issued
$1,200,000
Paid-in capital in excess of stated value
200,000
Appropriation per loan agreement
75,200
Unappropriated retained earnings
424,000
Treasury stock (3,000 shares at cost)
(72,000)
During 2011, the following transactions occurred in the order listed:
1. Issued 10,000 shares of stock for $368,000.
2. Declared a 4% stock dividend when the market price was $48 per share.
3. Sold 1,000 shares of treasury stock for $43,200.
4. Issued stock certificates for the stock dividend declared in transaction 2.
5. Bought 2,000 shares of treasury stock for $67,200.
6. Increased the appropriation by $43,200 per loan agreement.
Required
Prepare journal entries as necessary for these transactions.
Common stock—no-par value, stated value of $20; 100,000 shares authorized, 60,000 shares issued
$1,200,000
Paid-in capital in excess of stated value
200,000
Appropriation per loan agreement
75,200
Unappropriated retained earnings
424,000
Treasury stock (3,000 shares at cost)
(72,000)
Explanation / Answer
Journal Entry Date Accounting titles & Explanations Debit Credit 1) cash 368,000 Comon stock (10000*20) 200000 Paid in capital in excess of stated value 168,000 2) Retained earnings (60000+10000-3000)*4%*48 128640 common stock div distributable (2680*20) 53600 paid in capital in excess of stated value 75040 3) Treasury stock 43,200 cash 43,200 4) Common stock dividend distributable 53,600 common stokc. 53,600 5) Treasury stock 67,200 cash 67,200 6) Appropirated retained earnings 43,200 Unappropirated retained earnings 43,200
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.