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

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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.


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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