Q44PGA_1
Question
Journalizing dividend and treasury stock transactions, preparing a statement of retained earnings, and preparing stockholders’ equity
The balance sheet of Goldstein Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity:
Common Stock—\(10 Par Value; 350,000 shares
authorized, 32,000 shares issued and outstanding
Paid-In Capital:
160,000
\) 320,000
650,000
Retained Earnings
Total Stockholders’ Equity \( 810,000
Stockholders’ Equity
Paid-In Capital in Excess of Par—Common 330,000
Total Paid-In Capital
During 2018, Goldstein completed the following selected transactions:
Feb. 6 Declared a 15% stock dividend on common stock. The market value of
Goldstein’s stock was \)25 per share.
15 Distributed the stock dividend.
Jul. 29 Purchased 2,300 shares of treasury stock at \(25 per share.
Nov. 27 Declared a \)0.10 per share cash dividend on the common stock outstanding.
Requirements
1. Record the transactions in the general journal.
Step-by-Step Solution
VerifiedThe total debit and credit side of the journal is $228,700
Journal is the first step of the accounting process, which means recording every business's monetary transaction.
Date | Transaction | Debit | Credit |
Feb 6 | Stock dividend | $120,000 |
|
| Common stock distributable |
| $48,000 |
| Paid- in capital in excess of par |
| $72,000 |
| (To record stock dividend declared) |
|
|
|
|
|
|
Feb 15 | Common stock distributable | $48,000 |
|
| Common stock |
| $48,000 |
| (To record stock dividend paid) |
|
|
|
|
|
|
July 29 | Treasury stock | $57,500 |
|
| Cash |
| $57,500 |
| (To record purchase of treasury stock) |
|
|
|
|
|
|
Nov 27 | Retained earnings | $3,200 |
|
| Common stock dividend payable |
| $3,200 |
| (To record dividend declared) |
|
|
|
|
|
|