Explore BrainMass

Explore BrainMass

    Amerspec Enterprise Inc.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Amerspec Enterprise Inc. produces aeronautical navigation equipment. The stockholders' equity accounts of Amerspec Enterprises Inc., with balances on January 1, 2006, are as follows;

    Common Stock, $10 stated value (100,000 shares authorized,

    60,000 shares issued) ............................................................ $600,000

    Paid-in Capital in Excess of Stated Value ................................... 150,000

    Retained Earnings ............................................................... 497,750

    Treasury Stock (7,500 shares, at cost) ....................................... 120,000

    The following selected transactions occurred during the year:

    Jan. 19. Paid cash dividends of $0.60 per share on the common stock. The dividends had been properly recorded when declared on December 28 of the preceding year for $31,500.

    Feb. 2. Sold all of the treasury stock for $150,000.

    Mar. 15. Issued 20,000 shares of common stock for $480,000.

    July. 30. Declared a 2% stock dividend on common stock, to be capitalized at the market
    Price of the stock, which is $25 a share.

    Aug. 30. Issued the certificates for the dividend declared on July 30.

    Oct. 10. Purchased 5,000 shares of treasury stock for $105,000.

    Dec. 30. Declared a $0.50-per-share dividend on common stock

    31. Closed the credit balance of the income summary account, $182,500.

    31. Closed the two dividends accounts to Retained Earnings.

    Required:
    1. Enter the January 1 balances in T accounts for the stockholders' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends.
    2.Journalize the entries to record the transactions, and post to the eight selected accounts.
    3.Prepare a retained earnings statement for the year ended December 31, 2006.
    4.Prepare the stockholders' equity section of the December 31, 2006 balance sheet.

    © BrainMass Inc. brainmass.com June 3, 2020, 7:44 pm ad1c9bdddf
    https://brainmass.com/business/accounting/amerspec-enterprise-inc-111024

    Solution Preview

    Amerspec Enterprise Inc. produces aeronautical navigation equipment. The stockholders' equity accounts of Amerspec Enterprises Inc., with balances on January 1, 2006, are as follows;

    Common Stock, $10 stated value (100,000 shares authorized,

    60,000 shares issued) ............................................................ $600,000

    Paid-in Capital in Excess of Stated Value ................................... 150,000

    Retained Earnings ............................................................... 497,750

    Treasury Stock (7,500 shares, at cost) ....................................... 120,000

    The following selected transactions occurred during the year:

    Jan. 19. Paid cash dividends of $0.60 per share on the common stock. The dividends had been properly recorded when declared on December 28 of the preceding year for $31,500.

    Feb. 2. Sold all of the treasury stock for $150,000.

    Mar. 15. Issued 20,000 shares of common stock for $480,000.

    July. 30. Declared a 2% stock dividend on common stock, to be capitalized at ...

    Solution Summary

    This solution is comprised of a detailed explanation to enter the January 1 balances in T accounts for the stockholders' equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends, journalize the entries to record the transactions, and post to the eight selected accounts, prepare a retained earnings statement for the year ended December 31, 2006, and prepare the stockholders' equity section of the December 31, 2006 balance sheet.

    $2.19

    ADVERTISEMENT