The stockholders’ equity accounts of Ashley Corporation on January 1, 2012, were as follows.

The stockholders’ equity accounts of Ashley Corporation on January 1, 2012, were as follows.

Preferred Stock (8%, $49 par, cumulative, 10,600 shares authorized)		$  396,900
Common Stock ($1 stated value, 1,951,000 shares authorized)		1,362,300
Paid-in Capital in Excess of Par—Preferred Stock		144,800
Paid-in Capital in Excess of Stated Value—Common Stock		1,431,300
Retained Earnings		1,764,200
Treasury Stock (10,600 common shares)		53,000

During 2012, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1		Issued 24,300 shares of common stock for $115,600.
Apr. 14		Sold 6,000 shares of treasury stock—common for $33,600.
Sept. 3		Issued 4,800 shares of common stock for a patent valued at $34,000.
Nov. 10		Purchased 1,000 shares of common stock for the treasury at a cost of $5,800.
Dec. 31		Determined that net income for the year was $482,600.

No dividends were declared during the year.

Journalize the transactions and the closing entry for net income.

 

Explanation

Feb. 1		Common Stock	=	(24,300 x $1)	=	$24,300
		Paid-in Capital in Excess of Stated Value-Common Stock	=	($115,600 – $24,300)	=	$91,300
Apr. 14		Paid-in Capital from Treasury Stock	=	($33,600 – $30,000)	=	$3,600
		Treasury Stock	=	(6,000 x $5)	=	$30,000
Sept. 3		Common Stock	=	(4,800 x $1)	=	$4,800
		Paid-in Capital in Excess of Stated Value-Common Stock	=	($34,000 – $4,800)	=	$29,200

Enter the beginning balances in the accounts, and post the journal entries to the stockholders’ equity accounts. (Use J5 for the posting reference.)

Prepare a stockholders’ equity section at December 31, 2012.

ASHLEY CORPORATION Balance Sheet (Partial) December 31, 2012
Stockholders’ equity
Paid-in capital
Capital stock
8% Preferred stock, $49          par value, cumulative,          10,600 shares authorized,          8,100 shares issued and          outstanding					$396,900
Common stock, no par,          $1 stated value,          1,951,000 shares authorized,          1,391,400 shares issued          and 1,385,800 shares          outstanding					1,391,400
Total capital stock					1,788,300
Additional paid-in capital
Paid-in Capital in Excess of Par-Preferred Stock			$144,800
Paid-in Capital in Excess of Stated Value-Common Stock			1,551,800
Paid-in Capital from Treasury Stock			3,600
Total additional paid-in capital					1,700,200
Total paid-in capital					3,488,500
Retained earnings					2,246,800
Total paid-in capital and retained earnings					5,735,300
Less: Treasury stock (5,600 common shares)					(28,800	)
Total stockholders’ equity					$5,706,500