Absolutely! Let’s break down the problem **step by step** and explain how to record these transactions in the T accounts for the stockholders’ equity accounts. --- ### **Step 1: Understanding the Starting Balances** From the information given, here are your **beginning balances** as of January 1: - **Common Stock, $10 stated value:** $5,400,000 (540,000 shares issued) - **Paid-in Capital in Excess of Stated Value - Common Stock:** $1,050,000 - **Retained Earnings:** $12,260,000 - **Treasury Stock (54,000 shares at $14 each):** $756,000 --- ## **Step 2: Recording Each Transaction** Let’s go through each transaction and see how they affect the equity accounts. --- ### **Jan. 22: Paid cash dividends of $0.13 per share** - Dividend had already been *recorded* as a liability (so no effect on Retained Earnings here). - **No entry needed** in the stockholders’ equity T-accounts for Jan 22. --- ### **Apr. 10: Issued 105,000 shares of common stock at $16/share** **Entry:** - Common Stock: Increase by $1,050,000 (105,000 x $10 stated value) - Paid-in Capital in Excess of Stated Value: Increase by $630,000 [(16-10) x 105,000] --- ### **June 6: Sold all treasury stock (54,000 shares) for $918,000** - Cost of treasury stock sold: 54,000 x $14 = $756,000 - Proceeds: $918,000 - Excess: $162,000 goes to Paid-in Capital from Treasury Stock **Entry:** - Treasury Stock: Decrease by $756,000 (remove all treasury stock sold) - Paid-in Capital from Treasury Stock: Increase by $162,000 - Cash: Increase by $918,000 (not a stockholders' equity account) --- ### **July 5: 5% Stock Dividend (market price $18/share)** - Shares outstanding before dividend: 540,000 (issued) + 105,000 (issued in April) – 54,000 (treasury, now sold, so all are outstanding) = 645,000 shares. - 5% stock dividend: 645,000 x 5% = 32,250 shares - Value: 32,250 x $18 = $580,500 **Entry:** - Common Stock: Increase by $322,500 (32,250 x $10 stated value) - Paid-in Capital in Excess of Stated Value: Increase by $258,000 [(18-10) x 32,250] - Retained Earnings: Decrease by $580,500 (total value of stock dividend) --- ### **Aug. 15: Issued certificates for the dividend** - Already recorded in July 5. No additional entry. --- ### **Nov. 23: Purchased 34,000 shares of treasury stock for $646,000** **Entry:** - Treasury Stock: Increase by $646,000 --- ### **Dec. 28: Declared $0.16 per share cash dividend** - Shares outstanding: 645,000 (after April and July dividend) – 34,000 (treasury shares purchased in Nov) = 611,000 shares - Dividend: 611,000 x $0.16 = $97,760 **Entry:** - Debit Dividends (or Retained Earnings): $97,760 --- ### **Dec. 31: Close dividends to Retained Earnings** **Entry:** - Retained Earnings: Decrease by $97,760 --- ## **Step 3: Setting Up T Accounts** Here’s how the T accounts will look (showing only the main entries): --- #### **Common Stock** | Debit | Credit | |---------|----------| | | Begin: $5,400,000 | | | Apr 10: $1,050,000 | | | July 5: $322,500 | | **Ending:** $6,772,500 | --- #### **Paid-in Capital in Excess of Stated Value** | Debit | Credit | |---------|----------| | | Begin: $1,050,000 | | | Apr 10: $630,000 | | | June 6: $162,000 | | | July 5: $258,000 | | **Ending:** $2,100,000 | --- #### **Retained Earnings** | Debit | Credit | |---------|----------| | July 5: $580,500 (stock dividend) | Begin: $12,260,000 | | Dec 28: $97,760 (cash dividend) | | | **Ending:** $11,581,740 | --- #### **Treasury Stock** | Debit | Credit | |---------|----------| | Begin: $756,000 | June 6: $756,000 | | Nov 23: $646,000 | | | **Ending:** $646,000 | --- #### **Paid-in Capital from Treasury Stock** | Debit | Credit | |---------|----------| | | June 6: $162,000 | | **Ending:** $162,000 | --- ## **Step 4: December 31 Balances** - **Common Stock:** $6,772,500 - **Paid-in Capital in Excess of Stated Value:** $2,100,000 - **Retained Earnings:** $11,581,740 - **Treasury Stock:** $646,000 - **Paid-in Capital from Treasury Stock:** $162,000 --- ### **Summary Table:** | Account | Ending Balance | |------------------------------------------|------------------| | Common Stock | $6,772,500 | | Paid-in Capital in Excess of Stated Value| $2,100,000 | | Retained Earnings | $11,581,740 | | Treasury Stock | $646,000 | | Paid-in Capital from Treasury Stock | $162,000 | --- **If you need the T-accounts drawn out or further details on any entry, let me know!**

Certainly! Here's a clear presentation of the journal entries in proper format, showing how each transaction affects the relevant stockholders’ equity accounts: --- ### **1. Jan. 22: Paid cash dividends of $0.13 per share** *Note:* Since the dividends were declared in the previous year and already recorded, no additional entry is needed at this date. --- ### **2. Apr. 10: Issued 105,000 shares of common stock at $16 per share** **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | April 10 | Cash | $1,680,000 | | | | Common Stock | | $1,050,000 | | | Paid-in Capital in Excess of Stated Value | | $630,000 | *Explanation:* - Cash increases by 105,000 shares × $16 = $1,680,000 - Common Stock (at $10 stated value): 105,000 × $10 = $1,050,000 - Excess over stated value goes to Paid-in Capital: (16 - 10) × 105,000 = $630,000 --- ### **3. June 6: Sold all treasury stock (54,000 shares at $14 cost) for $918,000** **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | June 6 | Cash | $918,000 | | | | Treasury Stock | | $756,000 | | | Paid-in Capital from Treasury Stock | | $162,000 | *Explanation:* - Treasury Stock (cost): 54,000 × $14 = $756,000 - Cash received: $918,000 - The difference (profit) of $162,000 goes to Paid-in Capital from Treasury Stock --- ### **4. July 5: Declared a 5% stock dividend (market price $18/share)** **Number of Shares for Dividend:** - Before dividend, total shares are: Original + April issuance - Treasury shares sold = 540,000 + 105,000 - 0 = 645,000 shares - 5% of 645,000 = 32,250 shares **Value of Dividend:** - 32,250 shares × $18 = $580,500 **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | July 5 | Retained Earnings | $580,500 | | | | Common Stock | | $322,500 | | | Paid-in Capital in Excess of Stated Value | | $258,000 | *Explanation:* - Increase Common Stock by 32,250 shares × $10 = $322,500 - Increase Paid-in Capital in Excess of Stated Value by the difference: ($18 - $10) × 32,250 = $258,000 - Decrease Retained Earnings by total value of dividend: $580,500 --- ### **5. Aug. 15: Issued certificates for the dividend (already recorded on July 5)** *No additional journal entry required.* --- ### **6. Nov. 23: Purchased 34,000 shares of treasury stock for $646,000** **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | Nov 23 | Treasury Stock | $646,000 | | | | Cash | | $646,000 | *Explanation:* - Treasury Stock increases by the purchase cost. --- ### **7. Dec. 28: Declared $0.16 per share dividend** - Shares outstanding after all transactions, considering treasury stock: 540,000 + 105,000 (April issuance) + 32,250 (dividend) - 34,000 (treasury purchase) = 643,250 shares (approximate, based on earlier calculations) - Dividend per share: $0.16 - Total dividend: 611,000 shares × $0.16 = $97,760 (using the earlier estimate of shares outstanding) **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | Dec 28 | Retained Earnings | $97,760 | | | | Dividends Payable (or Cash) | | $97,760 | *Note:* Actual payment may be made later, but the dividend is declared now. --- ### **8. Dec. 31: Closing dividends accounts** **Journal Entry:** | Date | Account | Debit | Credit | |------------|----------------------------------|-------------------|-------------------| | Dec 31 | Dividends (or Dividends Payable) | $97,760 | | | | Retained Earnings | | $97,760 | --- **Summary:** These entries properly record all transactions affecting stockholders’ equity accounts. If you need, I can provide the T-account formats or help with calculating ending balances!