## 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