Eureka enterprises Inc. manufactures bathroom fixtures.
Eureka enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of the company, with balances on Jan. 1, 2008, are as follows:
Common Stock, $10 stated value
(500,000 shares authorized, 380,000 shares issued)............................$3,800,000
Paid-in Capital in Excess of Stated
value.................................................................................................760,000
Retained Earnings...................................................................................4,390,000
Treasury Stock (25,000 shares, at cost).......................................................500,000
The following selected transactions occurred during the year:
Jan. 10 Paid cash dividends of $0.20 per share on the common stock. The dividend had been properly recorded when declared on Dec. 30 of the proceeding fiscal year for $71,000.
Mar. 3 Issued 20,000 shares of common stock for $460,000.
May 21 Sold all of the treasury stock for $650,000.
July 1 Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $30 per share.
Aug. 15 Issued the certificates for the dividend declared on July1.
Sep 30 Purchased 10,000 shares of treasury stock for $230,000
Dec. 27 Declared a $0.25 per share dividend on common stock
Dec. 31 Closed the credit balance of the income summary account, $639,500.
Dec. 31 Closed the two dividends accounts to Retained Earnings.
Instructions:
1. Enter the Jan. 1 balances in T accounts for the stockholders' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from the Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.
2. Journalize the entries to record the transactions, and post to eight selected accounts.
3. Prepare a retained earnings statement for the year ended Dec. 31, 2008.
4. Prepare the Stockholders' Equity section of the Dec. 31, 2008 balance sheet.