219)
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.
220)
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.
221)
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.
222)
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.
223)
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.
224)
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.
225)
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.
121
226)
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 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.
1,200,000
Apr. 15
Common Stock Dividend Distributable
60,000
227)
A company had the following stockholders’ equity on January 1:
Common Stock — $1 par value; 1,000,000 shares authorized,
$ 350,000
350,000 shares issued and outstanding …………………….
Paid-in capital in excess of par value, common stock ……….
700,000
Retained earnings ……………………………………………
364,000
Total stockholders’ equity ……………………………………
$1,414,000
On January 10, the company declared a 40% stock dividend to stockholders of record on January 25,
to be distributed January 31. The market value of the stock on January 10 prior to the dividend was
$20 per share. What is the book value per common share on February 1?
180,000
72,000
36,000
228)
A company reported the following stockholders’ equity on January 1 of the current year:
Common stock, $10 par, 1,000,000 shares
$2,500,000
authorized, 250,000 shares issued …………………..
Paid-in capital in excess of par, common ………………
1,260,000
Retained earnings ………………………………………
1,675,000
Total stockholders’ equity …………………..………….
$5,435,000
Prepare journal entries for the following selected transactions related to this company’s stock during
the current year:
Mar. 1 Purchased 10,000 shares of treasury stock for $18 per share.
May 5 Sold 4,000 shares of treasury stock for $16 per share.
Oct. 12 Sold 2,000 shares of treasury stock for $19 per share.
125
229)
Underwood Company’s only treasury stock transactions for the current year follow: (1) 2,000 shares
of its common stock were purchased on June 1 for $80,000; (2) On July 1 it reissued 500 of these
shares at $45 per share; (3) On August 1 it reissued an additional 500 treasury shares at $38 per
share.
1) Prepare the journal entries required to record these transactions.
2) Calculate the balance in Paid-in Capital, Treasury Stock, on September 1 assuming its
beginning-year balance is zero.
230)
On January 10, Mood Corporation purchased 15,000 shares of its own common stock at $17.50 per
share. On August 4, a total of 2,000 treasury shares were sold at $19.00 per share. These are the
only treasury stock transactions ever made by the corporation. Prepare the journal entries required
on January 10 and August 4.
231)
Record the following transactions of Naches Corporation in general journal form:
(a) Reacquired 8,000 of its own $3 par value common stock at $20 cash per share. The stock was
originally issued at $15 per share.
(b) Sold 2,000 shares of the stock reacquired under part (a) at $23 cash per share.
(c) Sold 3,000 shares of the stock reacquired under part (a) at $19 cash per share.
SHORT ANSWER QUESTIONS
232)
The group responsible for and have final authority for managing a corporation’s activities is (are)
the ________.
233)
A corporation is responsible for its own acts and debts because it is considered a .
234)
The ________ protects stockholders’ proportional interest in a corporation by allowing them to
purchase their proportional share of any common stock later issued by the corporation.
235)
A stock ________ keeps stockholder records and prepares official lists of stockholders for
stockholder meetings and dividend payments.
236)
The number of shares that a corporation‘s charter allows it to sell is the ________ stock.
237)
The total amount of cash and other assets the corporation receives from its stockholders in
exchange for common stock is called ________.
238)
The cumulative net income and loss not distributed as dividends to a corporation’s shareholders is
called ________.
239)
Stock that has been issued and is held by stockholders is ________ stock.
240)
The amount assigned per share to stock by the corporation in its charter is the ________.
241)
Stock not assigned a value per share by the corporate charter, allowing it to be issued at any price
without the possibility of a minimum legal capital deficiency, is called .
242)
is a general term that refers to any shares issued to obtain owner financing in a
corporation.
243)
The least amount that the buyers of stock must contribute to the corporation or be subject to paying
at a future date is called ________.
244)
________ are corrections of material errors in prior period financial statements.
245)
________ is the amount of income earned per share of a company’s outstanding common stock.
246)
________ is the stockholders’ equity applicable to common shares divided by the number of
common shares outstanding.
247)
is the annual amount of cash dividends per share distributed to common shareholders
relative to the stock’s market price.
248)
When preferred stock is cumulative and the directors either do not declare a dividend to preferred
stockholders or declare one that does not cover the total amount of cumulative dividends, the
unpaid amount is called ________.