Accounting for Stock Transactions
Ellis Corporation was organized on June 30,2005. After 2 1/2 years of profitable operations, the equity section of Ellis’s balance sheet was as follows:
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Contributed capital: |
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Common stock, $3 par, 600,000 shares authorized, |
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200,000 shares issued and outstanding |
$600,000 |
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Paid in capital in excess of par |
6,000,000 |
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Retained earnings |
2,800,000 |
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Total stockholders’ equity |
$9,400,000 |
During 2008, the following transactions affected stockholders’ equity:
Jan. 31 Reacquired 10,000 shares of common stock at $32; treasury stock is recorded at cost.
Apr. 1 Declared a 30% stock dividend. (Applies to all issued stock.)
30 Declared a $0.75 cash dividend. (Applies only to outstanding stock.)
June 1 Issued the stock dividend and paid the cash dividend.
Aug. 31 Sold all treasury stock at $35.
Instructions: Provide the journal entries to record the stock transactions.