Explore BrainMass

Explore BrainMass

    Sixnut cash dividend stock dividend journal entries

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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
    Building 750,000
    Equipment 300,000
    Inventory 200,000

    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.

    Sixnut has 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.
     

     

    © BrainMass Inc. brainmass.com June 4, 2020, 1:24 am ad1c9bdddf
    https://brainmass.com/business/dividend-yield/sixnut-cash-dividend-stock-dividend-journal-entries-398562

    Solution Summary

    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.

    $2.19

    ADVERTISEMENT