Oct. 2 Retained Earnings . . . . . . . .120,000
Common Dividend Payable . . . . . . . . . . . . . 120,000
Declared $2.00 per share cash dividend to common shareholders
Oct. 25 Common Dividend Payable . .120,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Paid cash dividend
Oct. 31 Retained Earnings . . . . . . . . . . .150,000
Common Stock Dividend Distributable . . . . . . . . . .72,000
Contributed Capital in Excess of
Par Value, Common Stock . . . . . . . . . . . . . . . . . .78,000
Declared 10% stock dividend when market price was $25.00 per share.
Nov. 5 Common Stock Dividend Distributable . 72,000
Common Stock, $12 Par Value . . . . . . . . . . . . . . . . . 72,000
Distributed stock dividend. There are now 66,000 shares outstanding.
Dec. 1 Memo―Change the title of the common stock
account to reflect the new par value of $4.
Declared a 3-for-1 stock split. There are now 198,000 shares outstanding.
Dec. 31 Income Summary . . . . . .420,000
Retained Earnings . . . . . . . . . . . . . . . . . . .420,000
Closed out Income Summary to Retained Earnings for a $420,000 gain.
2. Complete the following table showing the equity account balances at each indicated date
I'll let you complete the table. Just add or subtract the above entries to the opening account balances.
Problem 13-3A At September 30, the end of Excel Company’s third quarter, the following stockholders’ equity accounts are reported
Problem 13-3A Equity analysis―journal entries and account balances
ANSWER KEY Problem 13-3A Excel Company’s third quarter
13. Accounting for Corporations
Larson?Wild?Chiappetta: Fundamental Accounting Principles, Seventeenth Edition
Text Questions
At September 30, the end of Excel Company’s third quarter, the following stockholders’ equity accounts are reported:
Common stock, $12 par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . $720,000
Contributed capital in excess of par value, common stock . . . . . . . 180,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640,000
In the fourth quarter, the following entries related to its equity accounts are recorded:
Oct. 2 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Common Dividend Payable . . . . . . . . . . . . . 120,000
Oct. 25 Common Dividend Payable . . . . . . . . . . . . . . . . . 120,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Oct. 31 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 150,000
Common Stock Dividend Distributable . . . . 72,000
Contributed Capital in Excess of
Par Value, Common Stock . . . . . . . . . . . . 78,000
Nov. 5 Common Stock Dividend Distributable . . . . . . . . 72,000
Common Stock, $12 Par Value . . . . . . . . . . . 72,000
Dec. 1 Memo―Change the title of the common stock
account to reflect the new par value of $4.
Dec. 31 Income Summary . . . . . . . . . . . . . . . . . . . . . . . . 420,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . 420,000
Required
1. Explain each journal entry.
2. Complete the following table showing the equity account balances at each indicated date
Oct. 2 Oct. 25 Oct. 31 Nov. 5 Dec. 1 Dec. 31
Common stock . . . . . . . . . . . . . . . . . . . $_____ $_____ $_____ $_____ $_____ $_____
Common stock dividend
distributable . . . . . . . . . . . . . . . . . . . . _____ _____ _____ _____ _____ _____
Contributed capital in
excess of par, common stock . . . . . . . _____ _____ _____ _____ _____ _____
Retained earnings . . . . . . . . . . . . . . . . . . _____ _____ _____ _____ _____ _____
Total equity . . . . . . . . . . . . . . . . . . . . . . $_____ $_____ $_____ $_____ $_____ $_____
