Background (prior problem data):
Sixnut, Incorporated has been authorized to issue 1,000,000 shares of $1 par common stock, and 100,000 shares of 8%, $100 par, cumulative, preferred stock. During the first six months of operation, the following transactions occurred related to the stock.
Jul 1st Sold 200,000 shares of common stock for $15 per share, and 100,000 shares of preferred stock, sold at par.
Jul 1st Issued 100,000 shares of common stock in exchange for the following assets: Land $250,000
The market value of the stock was $15 per share.
Sep 1st Sold 100,000 shares of common stock for $20 per share.
Oct 31st Repurchased 50,000 shares of common stock for $25 per share.
Sixnuthas elected to use the cost method to account for the treasury stock.
Nov 30th Re-sold 20,000 shares of the treasury stock for $35 per share.
Dec 31st Recorded net income for the first six months in the amount of $5,000,000.
Required: Prepare, in proper form, the journal entries required to account for the
dividend transactions shown below:
Mar 31st Declared a $2 per share dividend to the common stockholders of record at
April 15th, payable on April 30th.
Mar 31st Declared ½ of the annual preferred stock dividend to the stockholders of
record at April 15th, payable on April 30th.
Jun 30th Declared a 2 for 1 stock split.
Jul 31st Declared a 10% stock dividend to the common stockholders of record at
August 15th, to be distributed on August 31st. The market value of the
Stock on July 31st was $20 per share.
Sep 30th Declared ½ of the annual preferred stock dividend tot the stockholders of
record Oct 15th, payable on Oct 31st.
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The solution presents journal entries in excel so you can see the computations by clicking on the cells and so you have a template for future work.