Problem
Lennox Health Foods
Principles of Accounting II
Journalizing dividend and treasury stock transactions, and preparing stockholders' equity
The balance sheet of Lennox Health Foods, at December 31, 2011, reported 120,000 shares of no-par ordinary shares approved, with 25,000 shares issued and a Common stock balance of $190,000. Saved income had a balance of $115,000. In 2012, the company finished the following selected transactions:
Mar 15 Bought 9,000 shares of treasury stock at $8 for each share.
Apr 30 Distributed a 10% stock dividend on the outstanding shares of ordinary shares.
The market value of ordinary shares was $9 for each share.
Dec 31 Earned net income of $110,000 during the year. Closed net income to Saved income.
Task
• Document the dealings in the general journal. Explanations aren't needed.
• Prepare the stockholders' equity section of Lennox Health Foods' balance sheet on December 31, 2012.
The response must include a reference list. One-inch margins, double-space, Using Times New Roman 12 pnt font and APA style of writing and citations.