Below is the Stockholder's Equity section of the Reston Corporation's Balance Sheet as of December 31, 2021: Common Stocks ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,000 Paid-in Capital paid in excess of par value of common stock $850,000 Paid-in capital in excess of treasury stocks $300 Retained Earnings $3,000,000 Treasury Stock $12,000 Total Equity $5,848,300 1. Prepare the necessary journal entries for the following equity transactions that occurred during 2022. 2. Indicate how many outstanding shares the company has immediately after each transaction. January 5 - The company sold 15,000 previously unissued authorized shares of common stock at $8 each. March 1 - A 35% stock dividend applicable to all shares outstanding on this date was declared and distributed. The market value of the shares on this date was $15 each. April 1 - A 2:1 stock-split-up was declared. The market value of the shares on this date was $18 each. July 1 - A 10% stock dividend was declared and distributed. The market value of the shares on this date was $10 each. November 1 – 1,000 shares of portfolio were sold at $5.50 each.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
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Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...
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Below is the Stockholder's Equity section of the Reston Corporation's Balance Sheet as of December 31, 2021:

Common Stocks ($5 par value, 2,000,000 authorized, 402,000 issued, and 400,000 outstanding) $2,010,000

Paid-in Capital paid in excess of par value of common stock $850,000

Paid-in capital in excess of treasury stocks $300

Retained Earnings $3,000,000

Treasury Stock $12,000

Total Equity $5,848,300

1. Prepare the necessary journal entries for the following equity transactions that occurred during 2022.

2. Indicate how many outstanding shares the company has immediately after each transaction.

  • January 5 - The company sold 15,000 previously unissued authorized shares of common stock at $8 each.
  • March 1 - A 35% stock dividend applicable to all shares outstanding on this date was declared and distributed. The market value of the shares on this date was $15 each.
  • April 1 - A 2:1 stock-split-up was declared. The market value of the shares on this date was $18 each.
  • July 1 - A 10% stock dividend was declared and distributed. The market value of the shares on this date was $10 each.
  • November 1 – 1,000 shares of portfolio were sold at $5.50 each.

 

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