Question

✓ 4. Total stockholders' equity, $11,262,432 PR 12-4B Entries for selected corporate transactions Obj. 2, 3, 4, 6 Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Navo-Go Enterprises stockholders' equity accounts, with balances on January 1, 20Y1, are as follows: EXCEL TEMPLATE GENERAL LEDGER Common Stock, $5 stated value (900,000 shares authorized, 620,000 shares issued)..... $3,100,000 Paid-In Capital in Excess of Stated Value-Common Stock. 1,240,000 Retained Earnings ........... 4,875,000 Treasury Stock (48,000 shares, at cost) ........... 288,000 The following selected transactions occurred during the year: Jan. 15. Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $34,320. Mar. 15. Sold all of the treasury stock for $6.75 per share. Apr. 13. Issued 200,000 shares of common stock for $8 per share, June 14. Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $7.50 per share. July 16. Issued stock for stock dividend declared on June 14. Oct. 30. Purchased 50,000 shares of treasury stock for $6 per share. Dec. 30. Declared an $0.08-per-share dividend on common stock. 31. Closed the credit balance of the income summary account, $775,000. 31. Closed the two dividends accounts to Retained Earnings. (Continued)

Answer 1

1.

Common Stock Jan Bal. 3,100,000 Apг. July 13 1,000,000 16 123,000 Dec 31 Bal 4,223,000 Paid-In Capital in Excess of Stated Value-Common Stock Jan Apг. Bal 1 1,240,000 13 600,000 June 14 61,500 Dec Bal 31 1,901,500 Retained Earnings Jan 248,068 Bal. 4,875,000 Dec. 31 1 Dec 31 775.000 Dec Bal 31 5,401,932 Treasury Stock Jan Mar. 1 Bal 288,000 15 288,000 Oct 300.000 30 Dec Bal 31 300,000 Paid-In Capital from Sale of Treasury Stock Mar. 15 36,000 Stock Dividends Distributable 123,000 123,000 July 16 June 14 Stock Dividends 184,500 June 14 Dec. 31 184,500 Cash Dividends Dec Dec 63,568 31 63,568 30

2.

20Υ1 15 Cash Dividends Payable Jan 34,320 Cash 34,320 [(620,000 48,000 x $0.06] 15 Cash (48,000 x $6.75) Treasury Stock (48,000 x $6.00) Mar. 324,000 288,000 Paid-In Capital from Sale of Treasury Stock [48,000 x ($6.75 - $6.00)] 36,000 13 Cash (200,000 x $8) Common Stock (200,000 x $5) Apг. 1,600,000 1,000,000 Paid-In Capital in Excess of Stated Value Common Stock [200,000 x ($8 - $5)] 600,000 14 Stock Dividends [(620,000 200,000) x 3% x $7.50] Stock Dividends Distributable (24,600 x $5) June 184,500 123,000 Paid-In Capital in Excess of Stated Value Common Stock [24,600 x ($7.50 - $5.00)] 61,500 16 Stock Dividends Distributable July 123,000 Common Stock 123,000 Oct 30 Treasury Stock (50,000 x $6) 300,000 Cash 300,000 30 Cash Dividends Dec 63,568 Cash Dividends Payable 63,568 [(620,000 200,000 24,600 50,000) x $0.08] 31 Income Summary 775,000 Retained Earnings 775,000 31 Retained Earnings 248,068 Stock Dividends 184,500 Cash Dividends 63,568

3.

Nav-Go Enterprises Inc. Retained Earnings Statement For the Year Ended December 31, 20Y1 Retained earnings, January 1, 20Y1 $4,875,000 $775,000 Net income Cash dividends (63,568) (184,500) Stock dividends Change in retained earnings 526,932 $5,401,932 Retained earnings, December 31, 20Y1

4.

Stockholders' Equity Paid-in capital: Common stock, $5 stated value (900,000 shares $4,223,000 authorized, 844,600 shares issued) Excess of issue price over stated value 1,901,500 36,000 From sale of treasury stock Total paid-in capital Retained earnings $ 6,160,500 5,401,932 $11,562.432 (300,000) Total Treasury stock (50,000 shares at cost) $11,262,432 Total stockholders' equity