Explore BrainMass

# Pittman Corporation Dividends, Stock Splits, Stockholder's E

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

See attached worksheets for completion of problems.

The stockholder's equity section of the balance sheet of Pittman Corporation as of December 31, 20x7, was as follows:

Contributed Capital
Common stock, \$4 par value, 500,000 shares authorized,
200,000 shares issued and outstanding \$800,000
Additional paid-in capital \$1,000,000

Total Paid contributed capital \$1,800,000

Retained Earnings \$1,200,000

Total stockholder's equity \$3,000,000

Pittman Corporation had the following transactions in 20x8:
Feb 28. The board of directors declared a 10 percent stock dividend to stockholders of record on March 25 to be distributed on April 5. The market value on this date is \$16.

Mar. 25 Date of record for stock dividend.

Apr. 5 Issued stock dividend

Aug 3. Declared a 2 for 1 stock split

Nov 20 Purchased 18,000 shares of the company's common stock at \$8 per share for the treasury.

Dec. 31 Declared a 5 percent stock dividend to stockholders of record on January 25 to be distributed on February 5. The market value per share was \$9.

Required:
1. Record the stockholder's equity components of the transactions for Pittman Corporation in T accounts.

2. Prepare the stockholder's equity section of the company's balance sheet as of December 31 20x8. Assume net income for 20x8 is \$108,000.

© BrainMass Inc. brainmass.com June 3, 2020, 11:08 pm ad1c9bdddf
https://brainmass.com/business/stock-dividends-and-stock-splits/pittman-corporation-dividends-stock-splits-stockholder-s-e-264719

#### Solution Summary

This solution is comprised of a detailed explanation to record the stockholder's equity components of the transactions for Pittman Corporation in T accounts.

\$2.19