At the beginning of January 201X the stockholders equity of

At the beginning of January 201X, the stockholders’ equity of Mountain View Corporation consisted of the following:

Paid-In Capital

Common Stock, $30 par value, authorized 60,000 shares, 15,000 shares issued and outstanding

$450,000

Paid-In Capital in Excess of Par Value - Common

80,000

Total Paid-In Capital by Common

Stockholders

$530,000

Retained Earning

170,000

Total Stockholders’ Equity

$700,000

Figure 4

1. Record the transactions in general journal form.

2. Prepare the stockholders’ equity section at year-end using the Blueprint as a guide.

3. Prepare a statement of retained earnings at December 31, 201X. Accounts are provided in the working papers that accompany this text. Be sure to put in the beginning balances.

June 5     Mountain View Corporation purchased 1,000 shares of treasury stock at $34.

June 25     The board of directors voted a $0.20 per share cash dividend payable on July 20 to stockholders of record on July 4.

July 20     Cash dividend declared on June 25 is paid.

Sept. 10     Sold 300 shares of the treasury stock at $43 per share.

Sept. 30     Sold 700 shares of the treasury stock at $33 per share.

Oct. 15     The board of directors declared a 10% stock dividend distributable on January 2 to stockholders of record on November 2. The market value of the stock is currently $50 per share.

Dec. 31     Closed the net income of $70,000 in the Income Summary account to Retained Earnings.

Paid-In Capital
Common Stock, $30 par value, authorized 60,000 shares, 15,000 shares issued and outstanding	$450,000
Paid-In Capital in Excess of Par Value - Common	80,000
Total Paid-In Capital by Common
Stockholders	$530,000
Retained Earning	170,000
Total Stockholders’ Equity		$700,000

Solution

Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 5-Jun Treasury Stock    34,000.00 1,000 Shares X $34 Cash    34,000.00 (Record the purchase of Treasury Stock) 25-Jun Retained Earnings      2,800.00 14,000 shares X $0.20 Cash Dividend Payable      2,800.00 (Record the Cash Dividend declared) 20-Jul Cash Dividend Payable                             2,800.00 Cash      2,800.00 (record the dividend paid) 10-Sep Cash    12,900.00 300 Shares X $43 Treasury Stock    10,200.00 300 Shares X $34 Paid-In Capital in Excess of Par Value - Treasury      2,700.00 300 Shares X ($43-$34) (Record the sale of treasury stock) 30-Sep Cash    23,100.00 700 Shares X $33 Paid-In Capital in Excess of Par Value - Treasury          700.00 700 Shares X $1 Treasury Stock    23,800.00 700 Shares X $34 (Record the sale of treasury stock) 15-Oct Retained Earnings    75,000.00 15,000 Shares X 10% X $50 Common Stock Dividend Distributable    45,000.00 15,000 Shares X 10% X $30 Paid-in Capital in Excess of Par-Common Stock    30,000.00 15,000 Shares X 10% X $20 (record the stock dividend declared) 31-Dec Income Summary                      70,000.00 Retained Earnings    70,000.00 (To Close Net Income) Answer 3 MOUNTAIN VIEW CORPORATION Retained Earning Statement For the Year Ended Dec 31, 201X Balance, Jan 1, as Reported    170,000.00 Add: Net Income / (Loss)      70,000.00 Less: Stock Dividends - Common      75,000.00 Cash Dividends - Common        2,800.00      77,800.00 Balance, Dec-31    162,200.00 Answer 2. MOUNTAIN VIEW CORPORATION Balance Sheet (Partial) For the Year Ended Dec 31, 201X Stockholders\' Equity Paid-in Capital Capital Stock Common Stock - $30 Par Value, Authorized 60,000 Shares, 15000 Shares Issued & Outstanding    450,000.00 Common Stock Dividends Distributable      45,000.00    495,000.00 Total Capital Stock    495,000.00 Additional Paid-in Capital Paid-in Capital in Excess of Par-Common Stock      80,000.00 Paid-in Capital in Excess of Par-Treasury Stock        2,000.00 Total Additional Paid-in Capital      82,000.00 Total Paid-in Capital    577,000.00 Retained Earnings    162,200.00 Total Stockholders\' Equity    739,200.00