Brendon Hall
New member
Rocklin Corporation reports the following components of stockholders’ equity on December 31, 2009.
Common stock—$25 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $1,125,000
Paid-in capital in excess of par value, common stock $70,000
Retained earnings $430,000
Total stockholders’ equity $1,625,000
In year 2010, the following transactions affected its stockholders’ equity accounts.
Jan. 1
Purchased 4,500 shares of its own stock at $20 cash per share.
Jan. 5
Directors declared a $2 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 $24 cash per share.
Aug. 22
Sold 2,812 of its treasury shares at $17 cash per share.
Sept. 5
Directors declared a $2 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
Requirement 2:
Prepare a statement of retained earnings for the year ended December 31, 2010.
Requirement 3:
Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2010.
Common stock—$25 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $1,125,000
Paid-in capital in excess of par value, common stock $70,000
Retained earnings $430,000
Total stockholders’ equity $1,625,000
In year 2010, the following transactions affected its stockholders’ equity accounts.
Jan. 1
Purchased 4,500 shares of its own stock at $20 cash per share.
Jan. 5
Directors declared a $2 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 $24 cash per share.
Aug. 22
Sold 2,812 of its treasury shares at $17 cash per share.
Sept. 5
Directors declared a $2 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
Requirement 2:
Prepare a statement of retained earnings for the year ended December 31, 2010.
Requirement 3:
Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2010.