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Jojoo Corporation Journal Entries, Stockholder Equity and Income

The stockholders' equity accounts of Jajoo Coporation on January 1, 2008, were as follows:

Preferred Stock (10%, $100 par, noncumulative, 5,000 shares authorized - $300,000
Common Stock ($5 stated value, 300,000 shares authorized) - $1,000,000
Paid in Capital in Excess of Par Value - Preferred Stock - $20,000
Paid in Capital in Excess of Stated - Common Stock - $425,000
Retained Earnings - $488,000
Treasury Stock-Common (5,000 shares) - $40,000

During 2008, the corporation had the following transactions and events pertaining to its stockholders' equity:

Feb. 1 - Issued 3,000 shares of common stock.
Mar. 20 - Purchased 1,500 additional shares of treasury stock-common at $8 per share.
Mar. 21 - Sold 4,000 shares of treasury stock-common for $36,000.
Mar. 22 - Issued 2,000 shares of common stock for a patent valued at $17,000.
Mar. 23 - Determined that net income for the year was $340,000.

A). Journalize the transaction and the closing entry for net income.
B). Enter the beginning balances, and post the entries to the stockholders' equity accounts.
C). Prepare a stockholders' equity section at December 31, 2008.

Solution Summary

The solution contains an Excel spreadsheet showing how to journalize transaction and closing entries for net income, post entries to stockholders' equity accounts and prepare a stockholders' equity section for the Jojoo Corporation.