Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31 per share. On June 30, Knapp declared a cash dividend of $1.50 per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On November 1, Knapp reacquired 320,000 of its own shares of stock for $36 per share. On December 22, Knapp resold 160,000 of these shares for $42 per share. Required: a. Prepare all of the necessary journal entries to record the events described above. b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming that the net income for the year was $8,500,000.
Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of its $2 par value common stock for $31 per share. On June 30, Knapp declared a cash dividend of $1.50 per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On November 1, Knapp reacquired 320,000 of its own shares of stock for $36 per share. On December 22, Knapp resold 160,000 of these shares for $42 per share. Required: a. Prepare all of the necessary journal entries to record the events described above. b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming that the net income for the year was $8,500,000.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 12.14EX
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![Problem 11-237 [LO 11-2, LO 11-3]
Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of
its $2 par value common stock for $31 per share. On June 30, Knapp declared a cash dividend of $1.50
per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On
November 1, Knapp reacquired 320,000 of its own shares of stock for $36 per share. On December 22,
Knapp resold 160,000 of these shares for $42 per share.
Required:
a. Prepare all of the necessary journal entries to record the events described above.
b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming
that the net income for the year was $8,500,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7f57acd-42b9-466e-a85d-4609f38f005a%2F6be4d960-8f87-439d-b1ea-ab14c9b9e469%2Fkwkj7ek_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 11-237 [LO 11-2, LO 11-3]
Knapp Industries began business on January 1, 2018 by issuing all of its 1,600,000 authorized shares of
its $2 par value common stock for $31 per share. On June 30, Knapp declared a cash dividend of $1.50
per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On
November 1, Knapp reacquired 320,000 of its own shares of stock for $36 per share. On December 22,
Knapp resold 160,000 of these shares for $42 per share.
Required:
a. Prepare all of the necessary journal entries to record the events described above.
b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 assuming
that the net income for the year was $8,500,000.
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