Chapter 11 P11-2A
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Rocklin Corporation reports the following components of stockholders’ equity on December 31, 2009.
Common stock—$25 par value, 100,000 shares authorized, 45,000 shares issued and
outstanding
Paid-in capital in excess of par value, common stock
Retained earnings
Total stockholders’ equity
$1,125,000
60,000
460,000
$1,645,000
In year 2010, the following transactions affected its stockholders’ equity accounts.
Jan. 1 Purchased 4,500 shares of its own stock at $25 cash per share.
Directors declared a $3 per share cash dividend payable on Feb. 28 to the Feb. 5
Jan. 5
stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 1,688 of its treasury shares at $29 cash per share.
Aug. 22 Sold 2,812 of its treasury shares at $22 cash per share.
Directors declared a $3 per share cash dividend payable on October 28 to the September 25
Sept. 5
stockholders of record.
Oct. 28 Paid the dividend declared on September 5.
Closed the $388,000 credit balance (from net income) in the Income Summary account to
Dec. 31
Retained Earnings.
1.
value:
7 points
Requirement 1:
Prepare journal entries to record each of these transactions for 2010. (Omit the "$" sign in your
response.)
Date
Jan. 1
General Journal
Treasury Stock, Common
Debit
112500
112500
Cash
Jan. 5
Credit
Retained Earnings
Common Dividend Payable
Feb. 28
Common Dividend Payable
Cash
July 6
Cash
Treasury Stock, Common
1 of 3
48952
42,200
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Chapter 11 P11-2A
http://ezto.mhhm.mcgraw-hill.com/hm_accounting.tpx
Paid-In Capital, Treasury Stock
Aug. 22
6,752
Cash
61,864
Retained Earnings
Paid-In Capital, Treasury Stock
70300
Treasury Stock, Common
Sept. 5
Retained Earnings
Common Dividend Payable
Oct. 28
Common Dividend Payable
Cash
Dec. 31
388000
Income Summary
388000
Retained Earnings
Check My Work
2.
References
value:
8 points
Requirement 2:
Prepare a statement of retained earnings for the year ended December 31, 2010. (Input all amounts as
positive values. Omit the "$" sign in your response.)
ROCKLIN CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2010
Retained Earnings, Dec. 31, 2009
Add
: Net Income
Less
: Cash Dividends Declared
$
Treasury Stock Reissuances
Retained Earnings, Dec. 31, 2010
Check My Work
3.
$
References
value:
8 points
Requirement 3:
2 of 3
12/4/09 6:37 PM
Chapter 11 P11-2A
http://ezto.mhhm.mcgraw-hill.com/hm_accounting.tpx
Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2010.
(Omit the "$" sign in your response.)
ROCKLIN CORPORATION
Stockholders’ Equity Section of the Balance Sheet
December 31, 2010
Common stock—$25 par value, 100,000 shares authorized, 45,000
shares issued and outstanding
Paid-in capital in excess of par value, common stock
Retained Earnings
Total stockholders’ equity
Check My Work
3 of 3
References
12/4/09 6:37 PM