Cash dividends, treasury stock, and statement of retained earnings
Problem 13-2A: Cash dividends, treasury stock, and statement of retained earnings L.O. C2, C4, P2, P5
Rocklin Corporation reports the following components of stockholders' equity on December 31, 2009.
Common stock—$20 par value, 100,000 shares authorized,
60,000 shares issued and outstanding $ 1,200,000
Paid-in capital in excess of par value, common stock 70,000
Retained earnings 460,000
Total stockholders' equity $ 1,730,000
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In year 2010, the following transactions affected its stockholders' equity accounts:
Jan. 1 Purchased 4,500 shares of its own stock at $25 cash per share.
Jan. 5 Directors declared a $6 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 1,688 of its treasury shares at $29 cash per share.
Aug. 22 Sold 2,812 of its treasury shares at $22 cash per share.
Sept. 5 Directors declared a $6 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct. 28 Paid the dividend declared on September 5.
Dec. 31 Closed the $428,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Requirement 1:
Prepare journal entries to record these transactions for 2010. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Date General Journal Debit Credit
Jan. 1
Jan. 5
Feb. 28
July 6
Aug. 22
Sept. 5
Oct. 28
Dec. 31
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Requirement 2:
Prepare a statement of retained earnings for the year ended December 31, 2010. (Round your answers to the nearest dollar amount. Input all amounts as positive values. Omit the "$" sign in your response.)
ROCKLIN CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2010
$
:
:
$
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Requirement 3:
Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2010. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)
ROCKLIN CORPORATION
Stockholders' Equity Section of the Balance Sheet
December 31, 2010
Common stock—$20 par value, 100,000 shares
authorized, 60,000 shares issued and outstanding $
Paid-in capital in excess of par value, common stock
Retained earnings
Total stockholders' equity $
