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    Jojoo Corporation Journal Entries, Stockholder Equity and Income

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    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.

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    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.