Answered: Exercise 10-5 (Share Split and Reverse… | bartleby

Cornerstones of Financial Accounting

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 94.1C

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Exercise 10-5 (Share Split and Reverse Share Split; Recapitalization)
On June 30, 2014, the capital accounts of Japorms Company are as follows:
Ordinary Share Capital, P20 par, 50,000 shares
Ordinary Share Premium
P1,000,000
200,000

Instructions:
Prepare the necessary journal entry to record each of the following independent
transactions:
1.
The company undertakes a 5 for 1 share split.
The company undertakes a 1 for 4 share split.
One new ordinary share with a par value of P15 is issued in exchange for
one ordinary share with a par value of P25.
One new ordinary share with a stated value of P25 is issued in exchange
for one ordinary share with a par value of P25.
a.
b.
C.
d.
2.
State the number of capital shares issued and outstanding for each independent
transaction.

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Common Dividends Fusion Payroll Service began 2019 with 1,200,000 authorized and 375,000 issued and outstand ing $5 par common shares. During 2019, Fusion entered into the following transactions: Declared a S0.30 per-share cash dividend on March 10. Paid the $0.30 per-share dividend on April 10. Repurchased 8,000 common shares at a cost of $18 each on May 2. Sold 1.500 unissued common shares for $23 per share on June 9. Declared a $0.45 per-share cash dividend on August 10. Paid the $0.45 per-share dividend on September 10. Declared and paid a 5% stock dividend on October 15 when the market price of the common stock was $25 per share. Declared a $0.50 per-share cash dividend on November 10. Paid the $0.50 per-share dividend on December 10. Required: Prepare journal entries for each of these transactions. (Note: Round to the nearest dollar.) Determine the total dollar amount of dividends (cash and stock) for the year. CONCEPTUAL CONNECTION Determine the effect on total assets and total stockholders equity of these dividend transactions.

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