Duke Corporation reports the following components of stockholders’ equity on Dec
ID: 2600646 • Letter: D
Question
Duke Corporation reports the following components of stockholders’ equity on December 31, 2014:
Common stock—$5 par value, 100,000 shares authorized, 50,000 shares issued and outstanding
$250,000
Paid-in capital in excess of par value, common stock
60,000
Retained earnings
460,000
Total stockholders’ equity
$770,000
In 2015, the following transactions affected its stockholders’ equity accounts:
Jan. 1
Purchased 4,500 shares of its own stock at $27 cash per share.
Jan. 5
Directors declared a $3 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.
Feb. 28
Paid the dividend declared on January 5.
Mar. 3
Sold 1,000 shares of treasury stock for $28 per share.
May 25
Sold 1,000 shares of treasury stock for $16 per share.
June 15
Directors declared a $1.50 per share cash dividend payable on July 15 to the June
30 stockholders of record.
July 15
Paid the dividend declared on June 15.
Instructions: Prepare journal entries to record each of the transactions for 2015
Duke Corporation reports the following components of stockholders’ equity on December 31, 2014:
Common stock—$5 par value, 100,000 shares authorized, 50,000 shares issued and outstanding
$250,000
Paid-in capital in excess of par value, common stock
60,000
Retained earnings
460,000
Total stockholders’ equity
$770,000
In 2015, the following transactions affected its stockholders’ equity accounts:
Jan. 1
Purchased 4,500 shares of its own stock at $27 cash per share.
Jan. 5
Directors declared a $3 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.
Feb. 28
Paid the dividend declared on January 5.
Mar. 3
Sold 1,000 shares of treasury stock for $28 per share.
May 25
Sold 1,000 shares of treasury stock for $16 per share.
June 15
Directors declared a $1.50 per share cash dividend payable on July 15 to the June
30 stockholders of record.
July 15
Paid the dividend declared on June 15.
Explanation / Answer
Common stock - $5 par value $250,000 Paid-in capital in excess of par value, common stock $60,000 Retained earnings $460,000 $770,000 Explanation: Common stock ($5 par value, 100,000 shares authorized, 50,000 shares issued and outstanding) = $250,000 Date Accounts Titles & Explanation Debit Credit 1-Jan Treasury stock, Common $121,500 Cash $121,500 5-Jan Retained earnings $136,500 Common dividend payable $136,500 28-Feb Common dividend payable $136,500 Cash $136,500 3-Mar Cash $28,000 Treasury stock, Common $27,000 Paid-in capital, Treasury stock $1,000 25-May Cash $16,000 Paid-in capital, Treasury stock $1,000 Retained earnings $10,000 Treasury stock, Common $27,000 15-Jun Retained earnings $71,250 Common dividend payable $71,250 15-Jul Common dividend payable $71,250 Cash $71,250
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