Exercise 13 18 Cash dividends, treasury stock, and statement of retained earnings L.O. C3, P2, P3
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Kroll Corporation reports the following components of stockholders%u2019 equity on December 31, 2011. |
| Common stock%u2014$30 par value, 56,000 shares authorized, 46,000 shares issued and outstanding |
$ | 1,380,000 |
| Paid in capital in excess of par value, common stock | 51,000 | |
| Retained earnings | 272,000 | |
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| Total stockholders%u2019 equity | $ | 1,703,000 |
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In year 2012, the following transactions affected its stockholders%u2019 equity accounts. |
| Jan. | 2 |
Purchased 3,100 shares of its own stock at $30 cash per share. |
| Jan. | 7 |
Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record. |
| Feb. | 28 | Paid the dividend declared on January 7. |
| July | 9 | Sold 500 of its treasury shares at $35 cash per share. |
| Aug. | 27 | Sold 2,600 of its treasury shares at $28 cash per share. |
| Sept. | 9 |
Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. |
| Oct. | 22 | Paid the dividend declared on September 9. |
| Dec. | 31 |
Closed the $7,000 credit balance (from net income) in the Income Summary account to Retained Earnings. |
| Required: | |
| 1. |
Prepare journal entries to record each of these transactions for 2012. (Omit the “$” sign in your response.) |
| Date | General Journal | Debit | Credit | |
| Jan. | 2 | (Click to select) Common dividend payable Retained earnings Cash Common stock Treasury stock, common Paid in capital, treasury stock Dividends Income summary | ||
| (Click to select) Paid in capital, treasury stock Common stock Cash Common dividend payable Dividends Treasury stock, common Retained earnings Income summary | ||||
| Jan. | 7 | (Click to select) Income summary Paid in capital, treasury stock Common stock Common dividend payable Cash Treasury stock, common Dividends Retained earnings | ||
| (Click to select) Dividends Treasury stock, common Common stock Income summary Paid in capital, treasury stock Cash Common dividend payable Retained earnings | ||||
| Feb. | 28 | (Click to select) Income summary Treasury stock, common Common dividend payable Retained earnings Paid in capital, treasury stock Common stock Dividends Cash | ||
| (Click to select) Treasury stock, common Common dividend payable Common stock Income summary Dividends Retained earnings Paid in capital, treasury stock Cash | ||||
| July | 9 | (Click to select) Treasury stock, common Cash Income summary Paid in capital, treasury stock Common stock Dividends Retained earnings Common dividend payable | ||
| (Click to select) Retained earnings Cash Paid in capital, treasury stock Treasury stock, common Income summary Common dividend payable Common stock Dividends | ||||
| (Click to select) Cash Retained earnings Common dividend payable Dividends Paid in capital, treasury stock Income summary Treasury stock, common Common stock | ||||
| Aug. | 27 | (Click to select) Cash Paid in capital, treasury stock Common dividend payable Treasury stock, common Retained earnings Income summary Common stock Dividends | ||
| (Click to select) Paid in capital, treasury stock Dividends Treasury stock, common Income summary Common stock Common dividend payable Retained earnings Cash | ||||
| (Click to select) Treasury stock, common Common stock Cash Common dividend payable Paid in capital, treasury stock Retained earnings Income summary Dividends | ||||
| (Click to select) Paid in capital, treasury stock Income summary Retained earnings Dividends Treasury stock, common Common stock Common dividend payable Cash | ||||
| Sept. | 9 | (Click to select) Income summary Paid in capital, treasury stock Retained earnings Common dividend payable Dividends Treasury stock, common Cash Common stock | ||
| (Click to select) Common dividend payable Common stock Paid in capital, treasury stock Retained earnings Cash Treasury stock, common Income summary Dividends | ||||
| Oct. | 22 | (Click to select) Treasury stock, common Income summary Cash Common stock Dividends Retained earnings Common dividend payable Paid in capital, treasury stock | ||
| (Click to select) Retained earnings Treasury stock, common Paid in capital, treasury stock Common stock Income summary Common dividend payable Dividends Cash | ||||
| Dec. | 31 | (Click to select) Paid in capital, treasury stock Common dividend payable Cash Income summary Common stock Dividends Retained earnings Treasury stock, common | ||
| (Click to select) Income summary Paid in capital, treasury stock Treasury stock, common Common stock Common dividend payable Cash Retained earnings Dividends | ||||
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| 2. |
Prepare a statement of retained earnings for the year ended December 31, 2012. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.) |
| KROLL CORPORATION Statement of Retained Earnings For Year Ended December 31, 2012 |
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| (Click to select) Retained earnings, December 31, 2012 Common stock Retained earnings, December 31, 2011 Cash Common dividend payable | $ |
| (Click to select) Add: Net income Less: Net loss | |
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| (Click to select) Retained earnings, December 31, 2011 Less: Cash dividends declared Add: Cash dividends declared Add: Treasury stock reissuances Less: Treasury stock reissuances | |
| (Click to select) Less: Cash dividends declared Less: Treasury stock reissuances Add: Cash dividends declared Add: Treasury stock reissuances Retained earnings, December 31, 2011 | |
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| (Click to select) Less: Treasury stock reissuances Retained earnings, December 31, 2012 Less: Cash dividends declared Retained earnings, December 31, 2011 Add: Cash dividends declared | $ |
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| 3. |
Prepare the stockholders%u2019 equity section of the company%u2019s balance sheet as of December 31, 2012. (Omit the “$” sign in your response.) |
| KROLL CORPORATION Stockholders%u2019 Equity Section of the Balance Sheet December 31, 2012 |
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| (Click to select) Common stock Dividends Retained earnings Paid in capital in excess of par value Treasury stock | $ |
| (Click to select) Treasury stock Dividends Paid in capital in excess of par value Common stock Retained earnings | |
| (Click to select) Dividends Common stock Retained earnings Treasury stock Paid in capital in excess of par value | |
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| Total stockholders%u2019 equity | $ |
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rev: 02_21_2012