Horton Company Began Business on January 1, 2011 by Issuing

question 22

Essay

Horton Company began business on January 1, 2011 by issuing all of its 1,000,000 authorized shares of its
$1 par value common stock for $20 per share. On June 30, they declared a cash dividend of $1 per share to
stockholders of record on July 31. They paid the cash dividend on August 30. On November 1, Horton reacquired 200,000 of its own shares of stock for $25 per share. On December 22 they resold half of these shares for $30 per share.
a. Prepare all of the necessary journal entries to record the events described above.
b. Prepare the Stockholders' Equity section of the Balance sheet as of 12/31/2011 assuming that the Net Income for the year was $3,000,000.

---

Definitions:

Parallel

A circuit configuration where components are connected across common points or junctions, allowing current to divide and flow through multiple paths.

Series

Components in an electrical circuit are said to be in series if they are connected along a single path, so the same current flows through all of the components.

Inductive Reactance

The opposition to alternating current flow due to the inductance of a component or circuit, measured in ohms.

Reactive Power

Also called wattless power. Calculated by multiplying reactive voltage by reactive current. Can be produced by inductive or capacitive loads.