Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a company has the following at january 1, 2018 2,0

a company has the following at January 1, 2018 2,000,000 shares of common stock issued and...

Free

80.2K

Verified Solution

Question

Accounting

a company has the following at January 1, 2018

2,000,000 shares of common stock issued and $1 par outstanding4,000,000 shares authorized

Additional paid in capital $5,750,000

retained earnings $12,345,000

During 2018 the following happened

Net income: $6,789,000

cash dividend declared May 15: $.70 per share

cash dividends paid on Jun 30th

stock dividends declared on November 30th : 17%

stock dividend distributed on 12/31

the market price of the stock has been $36 all year

Prepare journal entries to record cash and stock dividends

prepare a owners equity section of the balance sheet of12/31/2018

Answer & Explanation Solved by verified expert
4.4 Ratings (835 Votes)

Journal entries

Date Title Debit Credit
15-May Cash dividends ($0.70*2,000,000) $    1,400,000
Dividend payable $    1,400,000
(To record declaration of cash dividend)
30-Jun Dividend payable $    1,400,000
Cash $    1,400,000
30-Nov Stock dividends (2,000,000*17%*$36) $ 12,240,000
Dividend distributable (2,000,000*17%*$1) $        340,000
Additional paid in capital $ 11,900,000
(To record declaration of stock dividend))
12-Dec Dividend distributable $        340,000
Common stock $        340,000
(To record issue of stock dividend)
Stockholders equity
As at 31 December 2018
Paid-in capital
Common stock, $1 par, 4,000,000 shares authorised, 2,340,000 shares issued and outstanding $    2,340,000
Additional paid in capital - Common stock ($5,750,000+$11,900,000) $ 17,650,000
Total paid in capital $ 19,990,000
Retained earnings ($12,345,000+$6,789,000-$1,400,000-$12,240,000) $    5,494,000
Total stockholders equity $ 25,484,000

If you have any doubts, You can reach me over comment box. please rate this answer.
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

From the observation deck of a skyscraper Bentley measures a 48 angle of depression to...

Geometry
Q

Human cells contain a protein that binds to the 5? triphosphate groups of RNA. Explain why...

Biology
Q

how is technology used for decision making?

Psychology
Q

20 If an organism has successful variations what usually occurs 21 The long neck of...

Biology
Q

What is the volume of this triangular pyramid 6 ft 5 ft 10 ft cubic...

Geometry
Q

3- OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to...

Accounting
Q

The Jill oil Company incurred $2,000,000 in exploration costs for each of 10 oil wells...

Accounting
Q

Help will thumbs up! BonitaCorporation reported net sales of $259000, $370000,...

Accounting
Q

FORUM DESCRIPTION List at least one example of a capital expense that you recently made?...

Accounting
Q

Assume that Congress plans to amend the federal individual income tax to eliminate the itemized...

Accounting
Q

The amount of the trade discount taken by the customer is: Multiple Choice recorded as...

Accounting
Q

Which of the following groups customarily does NOT attend a real estate closing? Multiple Choice...

Finance