Issued 410 shares of $80 par value preferred stock at par.
Issued 640 shares of $80 par value preferred stock in exchange for land that had an appraised value of $81,600.
Issued 21,000 shares of $4 par value common stock for $10 per share.
Purchased 5,200 shares of common stock for the treasury at $10 per share.
Sold 2,100 shares of the treasury stock purchased in transaction d for $12 per share.
Declared a cash dividend of $1.6 per share on the preferred stock outstanding, to be paid early next year.
Declared and issued a 4% stock dividend on the common stock when the market price per share of common stock was $14. (Assume state law allows stock dividends and stock splits on treasury stock.)
Retained earnings = $11,760
Common Stock _________
Additional paid-in capital _________
The Journal Entry for 4% Stock Dividend will be based 21,000 shares issued
Stock dividend ...
The solution provides the journal entry for stock dividend.
Prepare, in proper form, the journal entries required to account for the dividend transactions.
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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