214.
A corporation had the following stock outstanding when the company’s board of directors
declared a $75,000 cash dividend in the current year:
Preferred stock, $40 par, 6%, 12,500
shares issued
$500,000
Common stock, $10 par, 70,000
shares issued
700,000
Total
$1,200,000
Allocate the cash dividend between the preferred and common stockholders assuming the
preferred stock is noncumulative and nonparticipating.
Remainder to common:
215.
A corporation had the following stock outstanding when the company’s board of directors
declared a $55,000 cash dividend during the current year:
Preferred stock, $10 par, 4%, 50,000
shares issued
$500,000
Common stock, $1 par, 750,000
shares issued
750,000
Total
$1,250,000
Allocate the cash dividend between the preferred and common stockholders assuming the
preferred stock is cumulative and nonparticipating and dividends are one year in arrears.
Remainder to common:
216.
A company has $200,000 of 10% noncumulative, nonparticipating, preferred stock
outstanding, and $150,000 of common stock outstanding. In the company’s first year of
operation, no dividends were paid, but during the second year, it paid cash dividends of
$25,000. Compute the dividends to be distributed to (1) preferred shares and (2) common
shares.
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217.
A company was organized in January 2016 and has 20,000 shares of $10 par value, 10%,
nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common
stock outstanding. It has declared and paid cash dividends each year as shown below.
Calculate the total dividends distributed to each class of stockholder under each of the
assumptions given.
Assuming
Preferred
Stock
Is Noncumulative
Assuming
Preferred
Stock
Is Cumulative
Year
Cash
Dividends
Declared
and Paid
Preferred
Dividend
Common
Dividend
Preferred
Dividend
Common
Dividend
2016
$18,000
________
________
________
________
2017
$36,000
________
________
________
________
2018
$60,000
________
________
________
________
2016
$18,000
2017
$36,000
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Preferred dividend: 20,000 shares * $10 par * 10% = $20,000
218.
On June 30, a company declared a cash dividend of $0.35 per common share to the
shareholders of record on July 15. The cash dividend will be paid on July 31. This company
has 500,000 shares authorized and 100,000 shares outstanding. Prepare the journal
entries required on June 30, July 15 and July 31.
219.
The following selected transactions took place during the current year for a company:
Feb. 25
Declared a $2.50 per share cash
dividend on 20,000 shares of common
stock outstanding.
Mar. 20
Paid the cash dividends declared on Feb.
25.
Dec. 31
Closed the $72,000 credit balance in
Income Summary that reflects net
income to Retained Earnings.
(a) Prepare the journal entries for these transactions.
(b) If Retained Earnings had a $155,000 credit balance on January 1, calculate its year–
end balance as of December 31.
Common Dividend
Common Dividend
220.
Cactus Joe Corporation reported stockholders’ equity on January 1 of the current year as
follows: Common Stock, $5 par value, 1,000,000 shares authorized, 600,000 shares issued;
Paid-in Capital in Excess of Par Value, Common Stock, $1,025,000; Retained Earnings,
$1,850,000. Prepare journal entries to record the following transactions:
May 1
A cash dividend of $1.05 per common share was declared by the board of directors
to stockholders of record on May 20, payable June 1.
May 20
The date of record.
June 1
Paid the cash dividend.
May 1
Retained Earnings (600,000 * $1.05)
Common Dividend Payable
May 20
No entry required
221.
For each of the following
independent
transactions a through d, prepare the necessary
journal entry:
(a) Declared a $0.40 per share cash dividend on 300,000 shares of preferred stock
outstanding.
(b) Declared and distributed an 8% stock dividend on 800,000 shares of $5 par value
common stock outstanding. Market price per common share on this date was $25.
(c) Declared and distributed a 2-for-1 stock split on 400,000 shares of $10 par value
common stock outstanding.
(d) Declared and distributed a 35% stock dividend on 700,000 common shares of $1 par
value common stock outstanding. Market price per common share on this date was $20.
222.
Parlay Corporation has 2,000,000 shares of $0.50 par value common stock outstanding.
The following selected transactions related to the company’s stock took place during the
current year:
Apr.
15
Declared a 40% stock dividend to
stockholders of record on May 1, to be
issued May 10. The current market value
is $15 per common share.
Prepare necessary journal entries to record the events of April 15, May 1 and May 10.
223.
On August 1, a company’s board of directors declared a 10% stock dividend to be
distributed on September 1 to the stockholders of record on August 20. The company had
1,000,000 shares of $2.50 par value common stock outstanding with a market value of $23
per share. Prepare the journal entries required on August 1, August 20, and September 1.
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224.
Dynasty Corporation had stockholders’ equity on January 1 as follows: Common Stock, $5
par value, 1,000,000 shares authorized, 400,000 shares issued; Paid-in Capital in Excess of
Par Value, Common Stock, $800,000; Retained Earnings, $3,600,000. Prepare journal
entries to record the following transactions:
Feb.
15
The board of directors declared a 5%
stock dividend to stockholders of record
on March 1, to be issued on March 20.
The stock was trading at $7 per share
prior to the dividend.
Mar. 1
The date of record.
Mar.
20
Issued the stock dividend.
225.
A corporation had stockholders’ equity on January 1 as follows: Common Stock, $1 par
value, 1,500,000 shares authorized, 600,000 shares issued; Paid-in Capital in Excess of Par
Mar. 1
No entry required
Mar.
20
Common Stock Dividend
Common Stock
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Value, Common Stock, $1,100,000; Retained Earnings, $2,300,000. Prepare journal entries
to record the following transactions:
Feb. 15
The board of directors declared a 10%
stock dividend to stockholders of record
on March 1, to be issued on April 15.
The stock was trading at $12 per share
prior to the dividend.
Mar. 31
Sold 100,000 shares of common stock
for $13 per share.
Apr. 15
Issued the stock dividend.
Common Stock
Paid-in Capital in