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Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows:

Common stock, $8 par value, 300,000 shares authorized, 60,000 shares		480,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value	720,000
From treasury stock	45,000	765,000
Retained earnings		522,000
		1,767,000
Less: Treasury stock (6,000 shares) at cost		207,000
Total Stockholders Equity		1,560,000

The following transactions affecting stockholders equity occurred during the year:

Jan.	8	Issued 15,000 shares of previously unissued common stock for $31 cash per share.
Mar.	12	Sold all of the treasury shares for $42 cash per share.
June	30	Declared a five percent stock dividend on all outstanding shares of common stock. The market value of the stock was $37 per share.
July	10	Issued the stock dividend declared on June 30.
Oct.	7	Acquired 2,500 shares of common stock as treasury stock at $39 cash per share.
Dec.	18	Declared a cash dividend of $1.00 per outstanding common share, payable on January 9 to stockholders of record on December 31.

Required a. Prepare journal entries to record the foregoing transactions. b. Prepare a statement of stockholders equity. Net income for the year is $511,500.

Journal Entries

Statement of Stockholders' Equity

a.

General Journal
Date	Description	Debit	Credit
Jan.8	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Paid-in-Capital in Excess of Par Value
	Issued shares of common stock.
Mar.12	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Paid-in-Capital from Treasury Stock
	Sold shares of treasury stock.
Jun.30	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Paid-in-Capital in Excess of Par Value
	Declared stock dividend.
Jul.10	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Issued shares of common stock declared as dividend.
Oct.7	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Purchased shares of common stock for treasury.
Dec.18	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Declared cash dividend.
Dec.31	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	To close the income summary account.
Dec.31	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	Stock dividends
	CashCommon StockPaid-in-Capital in Excess of Par ValueTreasury StockPaid-in-Capital from Treasury StockStock DividendsStock Dividend DistributableCash DividendsDividends PayableIncome SummaryRetained earnings
	To close the dividend accounts.

b.

Note: Use negative signs with your answers when appropriate (reduction to retained earnings, acquired treasury stock and treasury stock balances).

Night Corporation Statement of Stockholders' Equity For Year Ended December 31
		Common Stock	Paid-in-Capital in Excess of Par	Paid-in-Capital from Treasury Stock	Retained Earnings	Treasury Stock	Total
Balance, January 1
	Common shares issued
	Treasury shares sold
Stock Dividends Issued
	Treasury shares acquired
Cash Dividends Declared
Net Income
Balance, December 31

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