Question

Exercise 13-18 Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Alexander Corporation reports the following components of stockholders' equity on December 31, 2016: Common stock-$25 par value, 50,000 shares authorized, Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 750,000 50,000 340,000 $1,140,000 n year 2017, the following transactions affected its stockholders' equity accounts. Jan. 2 Purchased 3,000 shares of its own stock at $25 cash per share. Jan. 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record. Feb. 28 Paid the dividend declared on January 7. July 9 Sold 1,200 of its treasury shares at $30 cash per share. Aug. 27 Sold 1,500 of its treasury shares at $20 cash per share. Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. Oct. 22 Paid the dividend declared on September 9. Dec. 31 Closed the $52,000 credit balance (fron net incone) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions for 2017 2. Prepare a statement of retained earnings for the year ended December 31, 2017. 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2017. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare journal entries to record each of these transactions for 2017.

Answer 1

(to record payment of dividend declared) Required 1 Journal Entries Date Credit particulan Debit 2.1.17 Treasury stock $75000 (3000 shore) $25) 175000 cash (to record purchase of treasury slocic) $40500 7.1.17 Retained Earnings (30000 - 3000) $1.50 $40500 Dividend payable (to record declaration of cash dividend) $40500 Dividend payable 28.2.17 Cash $40500

9.717 cash (4400 [1200 slaves $30) $36000 $ 30000 Treasury stock [1200 shares x425] paid-in capital from slo llc & 6000 treasury (436000 - 430000] (to record the sale of treasury stock 27.8.17 $ 30000 cash ſisoo slavee x $20] $6000 paid-in capital from Shoclo treasury Refaind Earnings $ 1500 [389500 - 430000 -46000] $37500 Treasury shocic (1500 sharex $25 lock) (to record the sale of I treasing

9.9.17 Retained Earnings &59400 $59400 Dividend payable (30000-3000 +1200+500]* $2 (to record the declaration of dividend to stock holdes) 22.10.17 Dividend payable $59400 Cash $59H00 (to record the payment of dividend declared & lol $ 52000 31.12.17 Income Summary $52000 Retained Earnings (to record the income to retained Earnings)

Required. 2 particulas Amount $340000 Refaind Earning as on 31-12.16 (+) Netpoolt $52000 Total $392000 G Caub dividends deelared (40500 +59400) ($99900) (-) Issue of treasury Sholic ($1500) $290600 Retained Earnings as on 31.12.17 BA Required. 3 Amount particulars $750000 Commonsdorn -$25 par value $ 50000 $290600 (t) paid in capital in excess of parvalus, common stock ti Retained earning - cost of treasury shock (75000 - 30000 - 37500) (95500) $ 1083100 rosal shock holden Equity