Entries for Selected Corporate Transactions Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises’ stockholders’ equity accounts, with...

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Accounting

Entries for Selected Corporate Transactions
Morrow Enterprises Inc. manufactures bathroom fixtures. MorrowEnterprises’ stockholders’ equity accounts, with balances onJanuary 1, 20Y6, are as follows:
Common Stock, $10 stated value (550,000 shares authorized,360,000 shares issued) $3,600,000
Paid-In Capital in Excess of Stated Value-Common Stock 700,000
Retained Earnings 8,170,000
Treasury Stock (36,000 shares, at cost) 504,000
The following selected transactions occurred during theyear:
Jan. 22. Paid cash dividends of $0.12 per share on the common stock. Thedividend had been properly recorded when declared on December 1 ofthe preceding fiscal year for $38,880.
Apr. 10. Issued 70,000 shares of common stock for $1,120,000.
June 6. Sold all of the treasury stock for $17 per share.
July 5. Declared a 5% Stock dividend on common stock, to be capitalizedat the market price of the stock, which is $18 per share.
Aug. 15. Issued shares of stock for the stock dividend declared on July5.
Nov. 23. Purchased 23,000 shares of treasury stock for $19 pershare.
Dec. 28. Declared a $0.15-per-share dividend on common stock.
31. Closed the credit balance of the income summary account,$8,497,000.
31. Closed the two dividends accounts to Retained Earnings.
Required:
1. The January 1 balances have been entered inT accounts for the stockholders' equity accounts. Record the abovetransactions in the T accounts and provide the December 31 balancewhere appropriate. If required, round to one decimal place.
Common Stock
Jan. 1 Bal. 3,600,000
Apr. 10
Aug. 15
Dec. 31 Bal.

Paid-In Capital in Excess of Stated Value-CommonStock
Jan. 1 Bal. 700,000
Apr. 10 420,000
July 5
Dec. 31 Bal.

Retained Earnings
Dec. 31 Jan. 1 Bal. 8,170,000
Dec. 31 8,497,000
Dec. 31 Bal.

Treasury Stock
Jan. 1 Bal. 504,000 June 6
Nov. 23 437,000
Dec. 31 Bal.

Paid-In Capital from Sale of Treasury Stock
June 6

Stock Dividends
July 5 Dec. 31

Cash Dividends
Dec. 28 Dec. 31
2. Journalize the entries to record thetransactions. For a compound transaction, if an amount box does notrequire an entry, leave it blank.
Jan. 22. Paid cash dividends of $0.12 per shareon the common stock. The dividend had been properly recorded whendeclared on December 1 of the preceding fiscal year for$38,880.
Date Account Debit Credit
Jan. 22 Cash Dividends Payable
Cash
Apr. 10. Issued 70,000 shares of common stockfor $1,120,000.
Date Account Debit Credit
Apr. 10 Cash
Common Stock
Paid-In Capital in Excess of Stated Value-Common Stock
June 6. Sold all of the treasury stock for $17per share.
Date Account Debit Credit
June 6 Cash
Treasury Stock
Paid-In Capital from Sale of Treasury Stock
July 5. Declared a 5% stock dividend on commonstock, to be capitalized at the market price of the stock, which is$18 per share.
Date Account Debit Credit
July 5 Stock Dividends
Stock Dividends Distributable
Paid-In Capital in Excess of Stated Value-Common Stock
Aug. 15. Issued shares of stock for thedividend declared on July 5.
Date Account Debit Credit
Aug. 15 Stock Dividends Distributable
Common Stock
Nov. 23. Purchased 23,000 shares of treasurystock for $19 per share.
Date Account Debit Credit
Nov. 23 Treasury Stock
Cash
Dec. 28. Declared a $0.15-per-share dividend oncommon stock.
Date Account Debit Credit
Dec. 28 Cash Dividends
Cash Dividends Payable
Dec. 31. Closed the credit balance of theincome summary account, $8,497,000.
Date Account Debit Credit
Dec. 31 Income Summary
Retained Earnings
Dec. 31. Closed the two dividends accounts toRetained Earnings.
Date Account Debit Credit
Dec. 31 Retained Earnings
Stock Dividends
Cash Dividends
3. Prepare a retained earnings statement forthe year ended December 31, 20Y6.
Morrow Enterprises Inc.
Retained Earnings Statement
For the Year Ended December 31, 20Y6
Retained Earnings, January 1, 20Y6
Net Income
Cash Dividends
Stock Dividends
Change in retained earnings
Retained Earnings, December 31, 20Y6
4. Prepare the Stockholders' Equity section ofthe December 31, 20Y6, balance sheet.
Morrow Enterprises Inc.
Balance Sheet
December 31, 20Y6
Stockholders' Equity
Paid-In-Capital:
Common Stock, $10 stated value (550,000 shares authorized,451,500 shares issued)
Excess of issue price over stated value
From Sale of Treasury Stock
Total Paid-In Capital
Retained Earnings
Total
Treasury Stock (23,000 shares, at cost)
Total Stockholders' Equity

Retained Earnings
Dec. 31	Jan. 1 Bal.	8,170,000
	Dec. 31	8,497,000
	Dec. 31 Bal.

Treasury Stock
Jan. 1 Bal.	504,000	June 6
Nov. 23	437,000
Dec. 31 Bal.

Paid-In Capital from Sale of Treasury Stock
		June 6

Stock Dividends
July 5		Dec. 31

Cash Dividends
Dec. 28		Dec. 31

Answer & Explanation Solved by verified expert

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2 In the books of Morrow Enterprises Inc Date Account Titles Debit Credit Jan 22 Cash Dividends Payable 38880 Cash 38880 Apr 10 Cash 1120000 Common Stock 700000 Paidin Capital in Excess of Stated Value 420000 June 6 Cash 612000 Treasury Stock 504000 Paidin Capital from Sale of Treasury See Answer

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Common Stock, $10 stated value (550,000 shares authorized,360,000 shares issued)	$3,600,000
Paid-In Capital in Excess of Stated Value-Common Stock	700,000
Retained Earnings	8,170,000
Treasury Stock (36,000 shares, at cost)	504,000

Jan. 22.	Paid cash dividends of $0.12 per share on the common stock. Thedividend had been properly recorded when declared on December 1 ofthe preceding fiscal year for $38,880.
Apr. 10.	Issued 70,000 shares of common stock for $1,120,000.
June 6.	Sold all of the treasury stock for $17 per share.
July 5.	Declared a 5% Stock dividend on common stock, to be capitalizedat the market price of the stock, which is $18 per share.
Aug. 15.	Issued shares of stock for the stock dividend declared on July5.
Nov. 23.	Purchased 23,000 shares of treasury stock for $19 pershare.
Dec. 28.	Declared a $0.15-per-share dividend on common stock.
31.	Closed the credit balance of the income summary account,$8,497,000.
31.	Closed the two dividends accounts to Retained Earnings.

Date	Account	Debit	Credit
Apr. 10	Cash
	Common Stock
	Paid-In Capital in Excess of Stated Value-Common Stock

Date	Account	Debit	Credit
July 5	Stock Dividends
	Stock Dividends Distributable
	Paid-In Capital in Excess of Stated Value-Common Stock

Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y6
Retained Earnings, January 1, 20Y6
Net Income
Cash Dividends
Stock Dividends
Change in retained earnings
Retained Earnings, December 31, 20Y6

Morrow Enterprises Inc. Balance Sheet December 31, 20Y6
Stockholders' Equity
Paid-In-Capital:
Common Stock, $10 stated value (550,000 shares authorized,451,500 shares issued)
Excess of issue price over stated value
From Sale of Treasury Stock
Total Paid-In Capital
Retained Earnings
Total
Treasury Stock (23,000 shares, at cost)
Total Stockholders' Equity