The following selected information is from Princeton Company’s comparative balance sheets. At December 31 2017 2016 Common stock, $10 par value $ 131,000 $ 126,000 Paid-in capital in excess of par 593,000 355,000 Retained earnings 339,500 313,500 The company’s net income for the year ended December 31, 2017, was $61,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during 2017. 2. Complete the T-account to calculate the cash paid for dividends during 2017.

Princeton Company

The T-accounts are attached.

Explanation:

They can also be obtained as follows:

1. T-accounts to calculate the Cash received from the sale of its common stock during 2017:

Common Stock & APIC

Closing balance of common stock = $131,000

Closing balance of APIC = $593,000

less Opening balance of common stock = $126,000

less Opening balance of APIC = $355,000

Cash collected = $243,000

2.  T-account to calculate the cash paid for dividends during 2017:

Retained Earnings:

Opening balance = $313,500

Add net income = $61,000

Less closing balance = $339,500

Cash Dividends paid = $35,000

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return