alters ads

Tuesday, 23 December 2014

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