NavGo Enterprises Inc produces aeronautical navigation equip

Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Navo-Go Enterprises\' stockholders\' equity accounts, with balances on January 1, 20Y1, are as follows:

The following selected transactions occurred during the year:

Instructions

Enter the January 1 balances in T accounts for the stockholders\' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.

Journalize the entries to record the transactions, and post to the eight selected accounts.

Prepare a retained earnings statement for the year ended December 31, 20Y6.

Prepare the Stockholders\' Equity section of the December 31, 20Y6, balance sheet.

Common Stock, $5 stated value (900,000 shares authorized, 620,000 shares issued)	$3,100,000
Paid-In Capital in Excess of Stated Value—Common Stock	1,240,000
Retained Earnings	4,875,000
Treasury Stock (48,000 shares, at cost)	288,000

Solution

Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 15-Jan Cash Dividends Payable          34,320.00 Cash          34,320.00 (record the dividends paid) 15-Mar Cash        324,000.00 48,000 shares X $6.75 Treasury Stock        288,000.00 48,000 shares X $6 Paid-in Capital in Excess of Stated Value - Treasury Stock          36,000.00 48,000 shares X $0.75 (record the issue of treasury stock) 13-Apr Cash    1,600,000.00 200,000 shares X $8 Common Stock    1,000,000.00 200,000 shares X $5 Paid-in Capital in Excess of Stated Value - Common Stock        600,000.00 200,000 shares X $3 (Record the isuue of common stock) 14-Jun Stock dividends        184,500.00 820,000 Shares X 3% X $7.50 Stock Dividends Distributable        123,000.00 24,600 Shares X $5 Paid-in Capital in Excess of Stated Value - Common Stock          61,500.00 24,600 Shares X $2.50 (record the stock dividend declared) 16-Jul Stock Dividends Distributable        123,000.00 Common Stock        123,000.00 (record the Common Stock issued as stock dividend) 30-Oct Treasury Stock        300,000.00 50,000 Shares x $6 Cash        300,000.00 50,000 Shares x $6 (record the purchase of treasury stock) 30-Dec Cash Dividends          63,568.00 794,600 shares X $0.08 Cash Dividends Payable          63,568.00 794,600 shares X $0.08 (record the cash dividends declared) 31-Dec Income Summary        775,000.00 Retained Earnings        775,000.00 (record the net income earned) 31-Dec Retained Earnings        248,068.00 Stock Dividends        184,500.00 Cash Dividends          63,568.00 (record the amount transferred to retained earnings) Answer 2. Common Stock Paid-in Capital in Excess of Stated Value - Common Stock Paid-in Capital in Excess of Stated Value - Treasury Stock Beg. Bal.    3,100,000.00 Beg. Bal.    1,240,000.00 Beg. Bal.                     -      1,000,000.00 13-Apr        600,000.00 13-Apr      36,000.00 15-Mar        123,000.00 16-Jul          61,500.00 14-Jun End. Bal.    4,223,000.00 End. Bal.    1,901,500.00 End. Bal.      36,000.00 Retained Earnings Treasury Stock Stock Dividends Beg. Bal.    4,875,000.00 Beg. Bal.    288,000.00        288,000.00 15-Mar Beg. Bal.                     -      184,500.00 31-Dec 31-Dec    248,068.00        775,000.00 31-Dec 30-Oct    300,000.00 14-Jun    184,500.00 End. Bal.    5,401,932.00 End. Bal.    300,000.00 End. Bal.                     -   Cash Dividends Payable Stock Dividends Distributable Cash Dividends Beg. Bal.          34,320.00 Beg. Bal.                         -   Beg. Bal.                     -        63,568.00 31-Dec 15-Jan      34,320.00          63,568.00 30-Dec 16-Jul    123,000.00        123,000.00 14-Jun 30-Dec      63,568.00 , End. Bal.          63,568.00 End. Bal.                         -   End. Bal.                     -   Answer 3. Nav-Go Enterprises Inc. Retained Earning Statement For the Year ended Dec 31, 20Y1 Beginning Balance Jan 1, 20Y1      4,875,000.00 Net Income          775,000.00 Sub-Total      5,650,000.00 Stock Dividends        (184,500.00) Cash Dividends          (63,568.00) Ending Balance, Dec 31, 20Y1      5,401,932.00 Answer 4. Nav-Go Enterprises Inc. Balance Sheet Partial As of Dec 31, 20Y1 Stockholders\' Equity Paid in Capital Common Stock, $5 Stated Value (900,000 Shares authorized, 844,600 Issued)      4,223,000.00 Paid-in Capital in Excess of Stated Value - Common Stock      1,901,500.00 Paid-in Capital in Excess of Stated Value - Treasury Stock            36,000.00 Total paid in Capital      6,160,500.00 Retained Earnings      5,401,932.00 Total    11,562,432.00 Treasury Stock (50,000 Shares)        (300,000.00) Total Stockholders\' Equity    11,262,432.00