Share
Explore BrainMass

Pittman Corporation Dividends, Stock Splits, Stockholder's E

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.

Attachments

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