Financial and Managerial Accounting: PR13-48 Nav-Go Enterprises Inc. produces aeronautical

Note: This is a variation of the original textbook problem so the numbers/amounts will be different. There are several other versions of this problem where amounts are different - so you need to make sure you take the time to COMPARE your requirements and what is shown in the website/below. However, if you review the solution we provided below, you can follow and understand how the answers were derived by checking the worksheet cell formulas and links as well as the notes and explanations indicated in the solution.



Financial and Managerial Accounting

PR13-48 Entries for selected corporate transactions

Nav-Go Enterprises Inc. produces aeronautical navigation equipment. The stockholders equity accounts of Nav-Go Enterprises Inc., with balances on January 1, 2014 are as follows:

Common stock, $5 stated value (900,000 shares authorized, 620,000 shares issued) 3,100,000

Paid-in capital in excess of stated value - Common stock 1,240,000

Retained earnings 4,875,000

Treasury stock (48,000 shares, at cost) 288,000



The following selected transactions occurred during the year:

Jan. 15. Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $34,320.

Mar. 15. Sold all the treasury stock for $6.75 per share.

Apr. 13. Issued 200,000 shares of common stock for $8 per share.

June 14. Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $7.50 per share.

July 16. Issued the certificates for the dividend declared on June 14.

Oct. 30. Purchased 50,000 shares of treasury stock for $6 per share.

Dec. 30. Declared a $0.08 per share dividend on common stock.

31. Closed the credit balance of the income summary account, $775,000.

31. Closed the two dividends accounts to Retained Earnings.



Instructions:

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 the eight selected accounts.

3. Prepare a retained earnings statement for the year ended December 31, 2014.

4. Prepare the Stockholders' Equity section of the December 31, 2014, balance sheet.
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