Exercise 4-3 Stockholders equity in TransWorld Inc. on December 31, 2010, is shown below: ...
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Exercise 4-3 Stockholders equity in TransWorld Inc. on December 31, 2010, is shown below:
Common stock: 60,000 authorized shares, par value of $15, 25,000 shares issued and outstanding
$375,000
Paid-in capital in excess of par value, common stock
90,000
Retained earnings
430,000
Total Equity
895,000
Stockholder equity accounts were affected by the following transactions in 2011: Jan 1 TransWorld purchased 2,000 treasury shares at $24/share. Jan 7 Declared a $3/share dividend, payable on Feb 15 to the Feb 28 stockholders of record. Feb 15 Paid the dividend (Jan 7 declaration). May 7 Sold 800 of treasury shares for cash at $27/share. Aug 15 Sold 1200 of treasury shares for cash at $21/share. Sep 20 Declared a $3/share dividend, payable on Oct 15 to the Sep 30 stockholders of record. Oct 15 Paid the dividend (Sep 20 declaration). Dec 31 Closed the credit balance of $188,000 (from net income) in the Retained Earnings Income Summary account. 1. Use the information provided to prepare the following: a. Journal entries for the 2011 transactions. b. December 31, 2011, retained earnings statement. c. For distinguished performance, prepare the investors equity section of TransWorlds December 31, 2011, balance sheet.
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