Great adventures has net income of 166000 in 2014 retained

Reference no: EM13609267

Tony and Suzie purchased land costing $470,000 for a new camp in January 2014. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow another million dollars, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp. Great Adventures has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. When the company began on July 1, 2012, Tony and Suzie each purchased 11,500 shares of $1 par value common stock at $1 per share. The following transactions affect stockholders' equity during 2014, its third year of operations: Jul. 2 Issue an additional 113,000 shares of common stock for $10 per share. Sep. 10 Repurchase 12,000 shares of its own common stock (i.e., treasury stock) for $12 per share. Nov. 15 Reissue 5,400 shares of treasury stock at $15 per share. Dec. 1 Declare a cash dividend on its common stock of $129,400 ($1 per share) to all stockholders of record on December 15. The dividend is payable on December 31.

Required:

1. Record each of the above transactions. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

2. Great Adventures has net income of $166,000 in 2014. Retained earnings at the beginning of 2014 was $159,000. Prepare the stockholders' equity section of the balance sheet for Great Adventures as of December 31, 2014.

Reference no: EM13609267

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