29 Jun Question Exercise 13-18 Cash dividends,
Question
Exercise 13-18 Cash dividends, treasury stock, and statement of retained earnings L.O. C3, P2, P3
Kroll Corporation reports the following components of stockholders’ equity on December 31, 2011.
Common stock—$27 par value, 53,000 shares authorized,
43,000 shares issued and outstanding $ 1,161,000
Paid-in capital in excess of par value, common stock 57,000
Retained earnings 275,000
Total stockholders’ equity $ 1,493,000
In year 2012, the following transactions affected its stockholders’ equity accounts.
Jan. 2
Purchased 3,500 shares of its own stock at $27 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 400 of its treasury shares at $32 cash per share.
Aug. 27 Sold 3,100 of its treasury shares at $25 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 $14,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required:
1.
Prepare journal entries to record each of these transactions for 2012. (Omit the “$” sign in your response.)
Date General Journal Debit Credit
Jan. 2
Jan. 7
Feb. 28
July 9
Aug. 27
Sept. 9
Oct. 22
Dec. 31
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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