Prepare the Stockholders’ Equity section of the December 31, 2007, balance sheet.
Aerotronics Enterprises Inc. produces aeronautical navigation equipment. The stockholders’  eq-
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                                                   uity accounts of Aerotronics Enterprises Inc., with balances on January 1, 2007, are as follows:
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Common Stock, $10 stated value (100,000 shares autho
60,000 shares issued)
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rized,
$600,000
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Paid-In Capital in Excess of Stated  Value
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150,000
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Retained Earnings
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497,750
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Treasury Stock (7,500 shares, at  cost)
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120,000
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The following selected transactions occurred during the  year:
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Jan.  19       Paid cash dividends of $0.60 per share on the common stock. The dividend had  been properly recorded when declared on December 28 of the preceding fiscal year  for
$31,500.
Feb.      2       Sold all of the treasury stock for $150,000.
Mar.  15      Issued 20,000 shares of common stock for   $480,000.
July  30       Declared a 2% stock dividend on common stock, to be capitalized at the market price of the stock, which is $25 a share.
Aug.  30       Issued the certificates for the dividend declared on July  30. Oct.  10               Purchased 5,000 shares of treasury stock for $105,000.
Dec. Â 30Â Â Â Â Â Â Â Declared a $0.50-per-share dividend on common stock.
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In addition, net income was $182,500 for the  year.
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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.
2.        Journalize the entries to record the transactions, and post to the six selected accounts.
3.        Prepare a retained earnings statement for the year ended December 31, 2007.
4.        Prepare the Stockholders’ Equity section of the December 31, 2007, balance sheet.
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Answers
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Posted 22 May 2017 08:05 AM
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