prepare a retained earnings statement for the year ended december 31 2012 554411
PR 13-4A Entries for selected corporate transactions
Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Tolbert Enterprises Inc., with balances on January 1, 2012, are as follows:
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prepare a retained earnings statement for the year ended december 31 2012 554411
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|
Common Stock, $10 stated value (600,000 shares authorized, 400,000 shares issued) |
$4,000,000 |
|
Paid-In Capital in Excess of Stated Value |
750,000 |
|
Retained Earnings |
9,150,000 |
|
Treasury Stock (40,000 shares, at cost) |
600,000 |
The following selected transactions occurred during the year:
|
Jan. 4. |
Paid cash dividends of $0.13 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fi scal year for $46,800. |
|
Apr. 3. |
Issued 75,000 shares of common stock for $1,200,000. |
|
June 6. |
Sold all of the treasury stock for $725,000. |
|
July 1. |
Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $18 per share. |
|
Aug. 15. |
Issued the certificates for the dividend declared on July 1. |
|
Nov. 10. |
Purchased 25,000 shares of treasury stock for $500,000. |
|
Dec. 27. |
Declared a $0.16-per-share dividend on common stock. |
|
31. |
Closed the credit balance of the income summary account, $950,000. |
|
31. |
Closed the two dividends accounts to Retained Earnings. |
Instructions
1. Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.
2. Journalize the entries to record the transactions, and post to the eight selected accounts.
3. Prepare a retained earnings statement for the year ended December 31, 2012.
4. Prepare the Stockholders’ Equity section of the December 31, 2012, balance sheet.
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