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
|
|
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