The stockholder's equity section of Rigby Moving and Storage Company's balance sheet as of December 31, 20x7 is shown below.
Common Stock, $2 par value, 3,000,000 shares authorized
500,00 shares issued and outstanding $1,000,000
Additional Paid-In capital 400,000
Total Contributed Capital $1,400,000
Retained Earnings $1,080,000
Total Stockholders Equity $2,480,000
The company engaged in the following stockholder's equity transactions during 20x8:
Mar 5 Declared a $.40 per share cash dividend to be paid on April 6 to stockholders of record March 20
Mar 20 Date of record
Apr 6 Paid the cash dividend
June 17 declared a 10 percent stock dividend to be distributed August 17 to stockholders of record on Aug 5. The market value of the stock was $14 per share.
Aug 5 Date of Record
17 Distributed the stock dividend
Oct 2 Split its stock 2 for 1
Dec 27 Declared a cash dividend of $.20 payable January 27, 20x9, to stockholders of record on January 14, 20x9.
1. Record the 20x8 transactions in journal form
2. Prepare the stockholder's equity section of the company's balance sheet as of December 31, 20x8. Assume net income for the year is $400,000
Using an Excel 97-2003 spreadsheet, this solution illustrates the effects of cash and stock dividends, as well as stock splits, on the company's stockholder's equity section.