(Learning Objective 2, 3, 4: Reconstructing transactions from the financial statements) A 1 Networking Solutions began operations on January 1, 20X7, and immediately issued its stock, receiving cash. A 1’s balance sheet at December 31, 20X7, reported the following stockholders’ equity:
|
Common stock, $1 par |
$ 50,000 |
|
Additional paid in capital |
200,600 |
|
Retained earnings |
38,000 |
|
Treasury stock, 500 shares |
(2,000) |
|
Total stockholders’ equity |
$286,600 |
During 20X7, A 1
a. Issued stock for $5 per share.
b. Purchased 800 shares of treasury stock, paying $4 per share.
c. Resold some of the treasury stock.
d. Earned net income of $56,000 and declared and paid cash dividends. Revenues were $171,000 and expenses totaled $115,000.
Required
Journalize all of A 1’s stockholders’ equity transactions during the year. A 1’s entry d. to close net income to Retained Earnings was:
|
Revenues |
171,000 |
|
Expenses |
115,000 |
|
Retained Earnings |
56,000 |