Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises’ stockholders’ equity accounts, with balances on January 1, 20Y6, are as follows: Common Stock, $10 stated value (850,000 shares authorized, 580,000 shares issued) $5,800,000 Paid-In Capital in Excess of Stated Value-Common Stock 1,100,000 Retained Earnings 13,170,000 Treasury Stock (58,000 shares, at cost) 870,000 The following selected transactions occurred during the year: Jan. 22. Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300. Apr. 10. Issued 110,000 shares of common stock for $1,980,000. June 6. Sold all of the treasury stock for $18 per share. July 5. Declared a 4% Stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share. Aug. 15. Issued shares of stock for the stock dividend declared on July 5. Nov. 23. Purchased 36,000 shares of treasury stock for $20 per share. Dec. 28. Declared a $0.18-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, $13,697,000. 31. Closed the two dividends accounts to Retained Earnings. Required: 1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place. Common Stock Jan. 1 Bal. 5,800,000 Apr. 10 fill in the blank 2 Aug. 15 fill in the blank 4 Dec. 31 Bal. fill in the blank 5 Paid-In Capital in Excess of Stated Value-Common Stock Jan. 1 Bal. 1,100,000 Apr. 10 fill in the blank 7 July 5 fill in the blank 9 Dec. 31 Bal. fill in the blank 10 Retained Earnings Dec. 31 fill in the blank 12 Jan. 1 Bal. 13,170,000 Nov. 23 fill in the blank 14 Dec. 31 Bal. fill in the blank 15 Treasury Stock Jan. 1 Bal. 870,000 June 6 fill in the blank 17 Nov. 23 fill in the blank 19 Dec. 31 Bal. fill in the blank 20 Paid-In Capital from Sale of Treasury Stock June 6 fill in the blank 22 Stock Dividends Distributable Aug. 15 fill in the blank 24 July 5 fill in the blank 26 Stock Dividends July 5 fill in the blank 28 Dec. 31 fill in the blank 30 Cash Dividends Dec. 28 fill in the blank 32 Dec. 31 fill in the blank 34 2. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 22. Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300. Date Account Debit Credit Jan. 22 fill in the blank 36 fill in the blank 38 Apr. 10. Issued 110,000 shares of common stock for $1,980,000. Date Account Debit Credit Apr. 10 fill in the blank 40 fill in the blank 41 fill in the blank 43 fill in the blank 44 fill in the blank 46 fill in the blank 47 June 6. Sold all of the treasury stock for $18 per share. Date Account Debit Credit June 6 fill in the blank 49 fill in the blank 50 fill in the blank 52 fill in the blank 53 fill in the blank 55 fill in the blank 56 July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share. Date Account Debit Credit July 5 fill in the blank 58 fill in the blank 59 fill in the blank 61 fill in the blank 62 fill in the blank 64 fill in the blank 65 Aug. 15. Issued shares of stock for the dividend declared on July 5. Date Account Debit Credit Aug. 15 fill in the blank 67 fill in the blank 69 Nov. 23. Purchased 36,000 shares of treasury stock for $20 per share. Date Account Debit Credit Nov. 23 fill in the blank 71 fill in the blank 73 Dec. 28. Declared a $0.18-per-share dividend on common stock. Date Account Debit Credit Dec. 28 fill in the blank 75 fill in the blank 77 Dec. 31. Closed the credit balance of the income summary account, $13,697,000. Date Account Debit Credit Dec. 31 fill in the blank 79 fill in the blank 81 Dec. 31. Closed the two dividends accounts to Retained Earnings. Date Account Debit Credit Dec. 31 fill in the blank 83 fill in the blank 84 fill in the blank 86 fill in the blank 87 fill in the blank 89 fill in the blank 90 3. Prepare a retained earnings statement for the year ended December 31, 20Y6. Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y6 fill in the blank 92 fill in the blank 94 fill in the blank 96 fill in the blank 98 fill in the blank 100 fill in the blank 102 4. Prepare the Stockholders' Equity section of the December 31, 20Y6, balance sheet. Morrow Enterprises Inc. Balance Sheet December 31, 20Y6 Stockholders' Equity Paid-In-Capital: fill in the blank 104 fill in the blank 106 fill in the blank 108 Total Paid-In Capital fill in the blank 109 fill in the blank 111 Total fill in the blank 112 fill in the blank 114 Total Stockholders' Equity fill in the blank 115

Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises’ stockholders’ equity accounts, with balances on January 1, 20Y6, are as follows: Common Stock, $10 stated value (850,000 shares authorized, 580,000 shares issued) $5,800,000 Paid-In Capital in Excess of Stated Value-Common Stock 1,100,000 Retained Earnings 13,170,000 Treasury Stock (58,000 shares, at cost) 870,000 The following selected transactions occurred during the year: Jan. 22. Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300. Apr. 10. Issued 110,000 shares of common stock for $1,980,000. June 6. Sold all of the treasury stock for $18 per share. July 5. Declared a 4% Stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share. Aug. 15. Issued shares of stock for the stock dividend declared on July 5. Nov. 23. Purchased 36,000 shares of treasury stock for $20 per share. Dec. 28. Declared a $0.18-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, $13,697,000. 31. Closed the two dividends accounts to Retained Earnings. Required: 1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place. Common Stock Jan. 1 Bal. 5,800,000 Apr. 10 fill in the blank 2 Aug. 15 fill in the blank 4 Dec. 31 Bal. fill in the blank 5 Paid-In Capital in Excess of Stated Value-Common Stock Jan. 1 Bal. 1,100,000 Apr. 10 fill in the blank 7 July 5 fill in the blank 9 Dec. 31 Bal. fill in the blank 10 Retained Earnings Dec. 31 fill in the blank 12 Jan. 1 Bal. 13,170,000 Nov. 23 fill in the blank 14 Dec. 31 Bal. fill in the blank 15 Treasury Stock Jan. 1 Bal. 870,000 June 6 fill in the blank 17 Nov. 23 fill in the blank 19 Dec. 31 Bal. fill in the blank 20 Paid-In Capital from Sale of Treasury Stock June 6 fill in the blank 22 Stock Dividends Distributable Aug. 15 fill in the blank 24 July 5 fill in the blank 26 Stock Dividends July 5 fill in the blank 28 Dec. 31 fill in the blank 30 Cash Dividends Dec. 28 fill in the blank 32 Dec. 31 fill in the blank 34 2. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 22. Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300. Date Account Debit Credit Jan. 22 fill in the blank 36 fill in the blank 38 Apr. 10. Issued 110,000 shares of common stock for $1,980,000. Date Account Debit Credit Apr. 10 fill in the blank 40 fill in the blank 41 fill in the blank 43 fill in the blank 44 fill in the blank 46 fill in the blank 47 June 6. Sold all of the treasury stock for $18 per share. Date Account Debit Credit June 6 fill in the blank 49 fill in the blank 50 fill in the blank 52 fill in the blank 53 fill in the blank 55 fill in the blank 56 July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share. Date Account Debit Credit July 5 fill in the blank 58 fill in the blank 59 fill in the blank 61 fill in the blank 62 fill in the blank 64 fill in the blank 65 Aug. 15. Issued shares of stock for the dividend declared on July 5. Date Account Debit Credit Aug. 15 fill in the blank 67 fill in the blank 69 Nov. 23. Purchased 36,000 shares of treasury stock for $20 per share. Date Account Debit Credit Nov. 23 fill in the blank 71 fill in the blank 73 Dec. 28. Declared a $0.18-per-share dividend on common stock. Date Account Debit Credit Dec. 28 fill in the blank 75 fill in the blank 77 Dec. 31. Closed the credit balance of the income summary account, $13,697,000. Date Account Debit Credit Dec. 31 fill in the blank 79 fill in the blank 81 Dec. 31. Closed the two dividends accounts to Retained Earnings. Date Account Debit Credit Dec. 31 fill in the blank 83 fill in the blank 84 fill in the blank 86 fill in the blank 87 fill in the blank 89 fill in the blank 90 3. Prepare a retained earnings statement for the year ended December 31, 20Y6. Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y6 fill in the blank 92 fill in the blank 94 fill in the blank 96 fill in the blank 98 fill in the blank 100 fill in the blank 102 4. Prepare the Stockholders' Equity section of the December 31, 20Y6, balance sheet. Morrow Enterprises Inc. Balance Sheet December 31, 20Y6 Stockholders' Equity Paid-In-Capital: fill in the blank 104 fill in the blank 106 fill in the blank 108 Total Paid-In Capital fill in the blank 109 fill in the blank 111 Total fill in the blank 112 fill in the blank 114 Total Stockholders' Equity fill in the blank 115

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...

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Question

Morrow Enterprises Inc. manufactures bathroom fixtures. Morrow Enterprises’ stockholders’ equity accounts, with balances on January 1, 20Y6, are as follows:

Common Stock, $10 stated value (850,000 shares authorized, 580,000 shares issued)	$5,800,000
Paid-In Capital in Excess of Stated Value-Common Stock	1,100,000
Retained Earnings	13,170,000
Treasury Stock (58,000 shares, at cost)	870,000

The following selected transactions occurred during the year:

Jan. 22.	Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300.
Apr. 10.	Issued 110,000 shares of common stock for $1,980,000.
June 6.	Sold all of the treasury stock for $18 per share.
July 5.	Declared a 4% Stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.
Aug. 15.	Issued shares of stock for the stock dividend declared on July 5.
Nov. 23.	Purchased 36,000 shares of treasury stock for $20 per share.
Dec. 28.	Declared a $0.18-per-share dividend on common stock.
31.	Closed the credit balance of the income summary account, $13,697,000.
31.	Closed the two dividends accounts to Retained Earnings.

Required:

1. The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate. If required, round to one decimal place.

Common Stock
		Jan. 1 Bal.	5,800,000
		Apr. 10	fill in the blank 2
		Aug. 15	fill in the blank 4
		Dec. 31 Bal.	fill in the blank 5

Paid-In Capital in Excess of Stated Value-Common Stock
		Jan. 1 Bal.	1,100,000
		Apr. 10	fill in the blank 7
		July 5	fill in the blank 9
		Dec. 31 Bal.	fill in the blank 10

Retained Earnings
Dec. 31	fill in the blank 12	Jan. 1 Bal.	13,170,000
		Nov. 23	fill in the blank 14
		Dec. 31 Bal.	fill in the blank 15

Treasury Stock
Jan. 1 Bal.	870,000	June 6	fill in the blank 17
Nov. 23	fill in the blank 19
Dec. 31 Bal.	fill in the blank 20

Paid-In Capital from Sale of Treasury Stock
		June 6	fill in the blank 22

Stock Dividends Distributable
Aug. 15	fill in the blank 24	July 5	fill in the blank 26

Stock Dividends
July 5	fill in the blank 28	Dec. 31	fill in the blank 30

Cash Dividends
Dec. 28	fill in the blank 32	Dec. 31	fill in the blank 34

2. Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 22. Paid cash dividends of $0.15 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $78,300.

Date	Account	Debit	Credit
Jan. 22		fill in the blank 36
			fill in the blank 38

Apr. 10. Issued 110,000 shares of common stock for $1,980,000.

Date	Debit	Credit
Apr. 10	fill in the blank 40	fill in the blank 41
	fill in the blank 43	fill in the blank 44
	fill in the blank 46	fill in the blank 47

June 6. Sold all of the treasury stock for $18 per share.

Date	Debit	Credit
June 6	fill in the blank 49	fill in the blank 50
	fill in the blank 52	fill in the blank 53
	fill in the blank 55	fill in the blank 56

July 5. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $20 per share.

Date	Debit	Credit
July 5	fill in the blank 58	fill in the blank 59
	fill in the blank 61	fill in the blank 62
	fill in the blank 64	fill in the blank 65

Aug. 15. Issued shares of stock for the dividend declared on July 5.

Date	Account	Debit	Credit
Aug. 15		fill in the blank 67
			fill in the blank 69

Nov. 23. Purchased 36,000 shares of treasury stock for $20 per share.

Date	Account	Debit	Credit
Nov. 23		fill in the blank 71
			fill in the blank 73

Dec. 28. Declared a $0.18-per-share dividend on common stock.

Date	Account	Debit	Credit
Dec. 28		fill in the blank 75
			fill in the blank 77

Dec. 31. Closed the credit balance of the income summary account, $13,697,000.

Date	Account	Debit	Credit
Dec. 31		fill in the blank 79
			fill in the blank 81

Dec. 31. Closed the two dividends accounts to Retained Earnings.

Date	Debit	Credit
Dec. 31	fill in the blank 83	fill in the blank 84
	fill in the blank 86	fill in the blank 87
	fill in the blank 89	fill in the blank 90

3. Prepare a retained earnings statement for the year ended December 31, 20Y6.

Morrow Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y6
		fill in the blank 92
	fill in the blank 94
	fill in the blank 96
	fill in the blank 98
		fill in the blank 100
		fill in the blank 102

4. Prepare the Stockholders' Equity section of the December 31, 20Y6, balance sheet.

Morrow Enterprises Inc. Balance Sheet December 31, 20Y6
Stockholders' Equity
Paid-In-Capital:
	fill in the blank 104
	fill in the blank 106
	fill in the blank 108
Total Paid-In Capital		fill in the blank 109
		fill in the blank 111
Total		fill in the blank 112
		fill in the blank 114
Total Stockholders' Equity		fill in the blank 115

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