Instructions - This is how the problem is presented...

Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders equity accounts of Morrow Enterprises Inc., with balances on January 1, 2016, are as follows:

Common stock, $20 stated value; 500,000 shares authorized, 383,000 issued	$7,660,000
Paid-In Capital in Excess of Stated ValueCommon Stock	957,500
Retained Earnings	35,012,000
Treasury Stock (25,700 shares, at cost)	462,600

The following selected transactions occurred during the year:

Jan.	22	Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $21,438.
Apr.	10	Issued 77,000 shares of common stock for $23 per share.
Jun.	6	Sold all of the treasury stock for $27 per share.
Jul.	5	Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share.
Aug.	15	Issued the certificates for the dividend declared on July 5.
Nov.	23	Purchased 33,000 shares of treasury stock for $20 per share.
Dec.	28	Declared a $0.08-per-share dividend on common stock.
	31	Closed the credit balance of the income summary account, $1,196,500.
	31	Closed the two dividends accounts to Retained Earnings

Required:
A.	Enter the January 1 balances in T accounts for the stockholders equity accounts listed.
B.	Journalize the entries to record the transactions, and post to the eight selected accounts. No post ref is required in the journal. Refer to the Chart of Accounts for exact wording of account titles.
C.	Prepare a retained earnings statement for the year ended December 31, 2016. Enter all amounts as positive numbers. The word Less is not required.*
D.	Prepare the Stockholders Equity section of the December 31, 2016, balance sheet. Less or Deduct will automatically appear if it is required. *

Amount Descriptions
Cash balance, July 31, 2016
Common stock, $20 stated value; 500,000 shares authorized, 383,000 issued
Common stock, $20 stated value; 500,000 shares authorized, 440,800 issued
Common stock, $20 stated value; 500,000 shares authorized, 473,800 issued
Decrease in retained earnings
Dividends
Excess of issue price over stated value
For the Year Ended December 31, 2016
From sale of treasury stock
Increase in retained earnings
Net income
Net loss
Retained earnings
Retained earnings, December 31, 2016
Retained earnings, January 1, 2016
Total
Total paid-in capital
Total stockholders equity

A. Enter the January 1 balances in T accounts for the stockholders equity accounts listed. Post the journal entries from part B to the eight selected accounts. No post ref is required in the journal.

Common Stock

Paid-In Capital in Excess of Stated Value-Common Stock

Retained Earnings

Treasury Stock

Paid-In Capital from Sale of Treasury Stock

Stock Dividends Distributable

Stock Dividends

Cash Dividends

B. Journalize the entries to record the transactions. No post ref is required in the journal. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

C. Prepare a retained earnings statement for the year ended December 31, 2016. Enter all amounts as positive numbers. The word Less is not required. Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.

Morrow Enterprises

Retained Earnings Statement

For the Year Ended December 31, 2016

1
2
3
4
5

D. Prepare the Stockholders Equity section of the December 31, 2016 balance sheet. Less or Deduct will automatically appear if it is required. Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.

Stockholders Equity

1	Paid-in capital:
2
3
4
5
6
7
8
9