This is a comprehensive problem all contained on this spreadsheet tab.
The stockholders equity section of the balance sheet of Frederick Mining Company is as follows:
Frederick Mining Company
Equity Section of Balance Sheet as of January 1, 2016
Common stock, $10 par value, 200,000 shares authorized
120,000 shares issued 1,200,000
Paid-in capital in excess of par value 3,711,250
Retained earnings 4,651,255
Total equity 9,562,505
Create a journal entry (if needed) for each of the following items.
Prepare an updated equity section of the balance sheet as of December 31, 2016. Scroll down past the journal entry section to see the heading for this.
1/28/2016 Frederick Mining enters into a loan-modification agreement with the bank, agreeing to appropriate $500,000 of retained earnings to loan repayment.
2/15/2016 Frederick Mining board of directors declares a $1.50-per-share dividend payable on 3/31/2016 to shareholders of record as of 3/15/2016. Frederick uses a dividends account to record dividends declared.
3/31/2016 Cash dividend declared on 2/15/2016 is paid.
7/22/2016 Frederick Mining board of directors declares a 10% stock dividend to be paid 8/15/2016 to shareholders of record as of 8/1/2016. The market value of the stock is $49 immediately prior to the declaration.
8/15/2016 Stock dividend declared on 7/22/16 is paid.
9/18/2016 Frederick Mining buys back 5,000 shares of company stock on the open market for $52 per share. The purchased shares are not retired but are held in treasury.
12/31/2016 Frederick Mining had the following income and expense account balance as of 12/31/2016. Close out income.
Debit Credit
Sales revenue 6,890,000
Cost of goods sold 4,752,600
Administrative salary expense 436,500
Office expense 118,560
Depreciation expense 12,000
Transportation expense 18,400
Interest expense 82,800
12/31/2016 Close out dividends.
Journal Entries Debit Credit
Frederick Mining Company
Equity Section of Balance Sheet as of December 31, 2016
