Accounting : Q5 - T Accounts , Journal , retained earnings statement , Stock Holders Equity

sheet_1.docx

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Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity The owners’ equity in a corporation. Accounts of Morrow Enterprises Inc., with balances on January 1, 2016, are as follows:

Common Stock, $20 stated value (500,000 shares authorized, 375,000 shares issued)	$ 7,500,000
Paid-In Capital in Excess of Stated Value—Common Stock	825,000
Retained Earnings	33,600,000
Treasury Stock (25,000 shares, at cost)	450,000

The following selected transactions occurred during the year:

Jan.	22	Paid cash dividends Distribution of a corporation’s earnings to stockholders. of $0.08 per share on the common stock The stock outstanding when a corporation has issued only one class of stock. . The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $28,000.
Apr.	10	Issued 75,000 shares of common stock for $24 per share.
Jun.	6	Sold all of the treasury stock for $26 per share.
Jul.	5	Declared a 4% stock Shares of ownership of a corporation. dividend on common stock, to be capitalized at the market price of the stock, which is $25 per share.
Aug.	15	Issued the certificates for the dividend declared on July 5.
Nov.	23	Purchased 30,000 shares of treasury stock for $19 per share.
Dec.	28	Declared a $0.10-per-share dividend on common stock.
	31	Closed the credit balance of the income summary account, $1,125,000.
	31	Closed the two dividends accounts to Retained Earnings.

Required:

Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed.

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.

Prepare a retained earnings statement

A summary of the changes in the retained earnings in a corporation for a specific period of time, such as a month or a year.

for the year ended December 31, 2016. Enter all amounts as positive numbers. The word “Less” is not required.*

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.

CHART OF ACCOUNTS

Morrow Enterprises Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable
	EQUITY
311	Common Stock
313	Paid-In Capital in Excess of Stated Value-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

Amount Descriptions

Cash balance, July 31, 2016

Common stock, $20 stated value; 500,000 shares authorized, 375,000 issued

Common stock, $20 stated value; 500,000 shares authorized, 438,000 issued

Common stock, $20 stated value; 500,000 shares authorized, 468,000 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