CHAPTER 14
SOLUTIONS TO PROBLEMS: SET B
PROBLEM 14-1B
(a) Jan. 15 Cash Dividends (200,000 X $1) …………. 200,000
Dividends Payable ……………………. 200,000
Feb. 15 Dividends Payable …………………………... 200,000
Cash ………………………………………… 200,000
May 15 Common Stock Dividends
Distributable ……………………………….. 100,000
Common Stock (20,000 X $5) …….. 100,000
31 Income Summary ……………………………. 250,000
Retained Earnings ……………………. 250,000
Retained Earnings …………………………... 420,000
Cash Dividends ………………………… 420,000
PROBLEM 14-1B (Continued)
(b)
Common Stock
Date
Explanation
Ref.
Credit
Balance
Jan. 1
May 15
Balance
100,000
1,000,000
1,100,000
Common Stock Dividends Distributable
Date
Explanation
Ref.
Debit
Credit
Balance
100,000
0
Apr. 15
100,000
100,000
Paid-in Capital in Excess of Par—Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Apr. 15
Balance
200,000
200,000
400,000
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
250,000
Jan. 1
Balance
840,000
Cash Dividends
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 1
220,000
420,000
420,000
0
Jan. 15
200,000
200,000
PROBLEM 14-1B (Continued)
Stock Dividends
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 15
300,000
300,000
(c) CHEN CORPORATION
Balance Sheet (Partial)
December 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $2.50 par value, 440,000
shares issued and outstanding ………….. $1,100,000
PROBLEM 14-2B
(a) July 1 Cash Dividends
[($900,000 ÷ $10) X $.50] ………………. 45,000
Dividends Payable …………………… 45,000
Aug. 1 Accumulated Depreciation—
Sept. 1 Dividends Payable ………………………….. 45,000
Cash ……………………………………….. 45,000
Dec. 1 Stock Dividends (9,000 X $16) …………. 144,000
Common Stock Dividends
Distributable (9,000 X $10) …….. 90,000
Paid-in Capital in Excess of
15 Cash Dividends
[6,000 X ($100 X 7%)] …………………… 42,000
Dividends Payable …………………… 42,000
Retained Earnings ………………………….. 144,000
Stock Dividends ………………………. 144,000
(b)
Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
600,000
PROBLEM 14-2B (Continued)
Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
900,000
Common Stock Dividends Distributable
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 1
90,000
90,000
Paid-in Capital in Excess of Par—Preferred Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
100,000
Paid-in Capital in Excess of Par—Common Stock
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 1
254,000
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
144,000
691,000
Jan. 1
Aug. 1
Balance
Prior period
500,000
PROBLEM 14-2B (Continued)
Cash Dividends
Date
Explanation
Ref.
Debit
Credit
Balance
July 1
45,000
45,000
Stock Dividends
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 1
144,000
144,000
(c) HOLT, INC.
Retained Earnings Statement
For the Year Ended December 31, 2017
Balance, January 1, as reported …………………. $500,000
Correction of 2016 depreciation …………………. 72,000
PROBLEM 14-2B (Continued)
(d) HOLT, INC.
Balance Sheet (Partial)
December 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
7% Preferred stock, $100 par
value, 6,000 shares issued …. $ 600,000
Common stock, $10 par value,
Additional paid-in capital
In excess of par—
preferred stock ………………….. 100,000
In excess of par—
PROBLEM 14-3B
(a)
Retained Earnings
Dec. 31 Stock Dividends 360,000
Dec. 31 Net Income 970,000
Dec. 31 Balance 2,560,000
Dec. 31 Cash Dividends 500,000
Jan. 1 Balance 2,450,000
(b) GIFFIN CORPORATION
Retained Earnings Statement
For the Year Ended December 31, 2017
Balance, January 1 ………………………………….. $2,450,000
Add: Net income ……………………………………. 970,000
(c) GIFFIN CORPORATION
Partial Balance Sheet
December 31, 2017
____________________________________________________________
Stockholders’ equity
Paid-in capital
Capital stock
6% Preferred stock, $100
par value, noncumulative,
callable at $125, 20,000
shares authorized, 10,000
PROBLEM 14-3B (Continued)
GIFFIN CORPORATION (Continued)
Additional paid-in capital
In excess of par—
preferred stock …………………. $ 200,000
In excess of stated value—
common stock ………………….. 1,180,000
(d) Total dividend ……………………………………………………………… $500,000
PROBLEM 14-4B
(a) DINGLER CORPORATION
Partial Balance Sheet
March 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
(b) DINGLER CORPORATION
Partial Balance Sheet
June 30, 2017
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, no-par value,
(c) DINGLER CORPORATION
Partial Balance Sheet
September 30, 2017
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, no-par value,
PROBLEM 14-4B (Continued)
(d) DINGLER CORPORATION
Partial Balance Sheet
December 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, no-par value,
PROBLEM 14-5B
Preliminary analysis (in thousands)—NOT REQUIRED
Common
Stock
Common Stock
Dividends
Distributable
Retained
Earnings
Total
Balance, Jan. 1
$3,000
$400
$1,200
$4,600
1. Issued 100,000
shares for stock
dividend
400
(400)
0
300
300
140
140
dividend
Balance, Dec. 31
$3,700
$1,640
$5,340
HAMMOND INC.
Partial Balance Sheet
December 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, no-par value,