# HM company has 1,000,000 shares of \$1 par value capital stock outstanding on January 1. The following equity transaction occurred during the current year.Apr. 30 Distributed additional shares of capital stock in a 2 for 1 stock splits. market price of stock was \$35 per share.June 1 Declare a cash dividend of \$ 0.60 cash dividendJuly 1 Paid the \$0.60 cash dividend to stockholders.Aug. 1 Declared a 5 percent stock dividend. Market price of stock was \$19 per shareSept. 10 Issued share resulting from the 5 percent stock dividend declared on August 1.Prepare journal entries to record these transactions.Compute the number of shares of capital stock outstanding at year-endWhat is par value per share of HM stock at the end of the yearDetermine the effect of each of the following on total stockholders’ equity: stock, equity split, declaration and payment of cash dividend, declaration and distribution of stock dividend (could be your answer increase decrease or no effect).

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HM company has 1,000,000 shares of \$1 par value capital stock outstanding on January 1. The following equity transaction occurred during the current year.

Apr. 30 Distributed additional shares of capital stock in a 2 for 1 stock splits. market price of stock was \$35 per share.

June 1 Declare a cash dividend of \$ 0.60 cash dividend

July 1 Paid the \$0.60 cash dividend to stockholders.

Aug. 1 Declared a 5 percent stock dividend. Market price of stock was \$19 per share

Sept. 10 Issued share resulting from the 5 percent stock dividend declared on August 1.

1. Prepare journal entries to record these transactions.
2. Compute the number of shares of capital stock outstanding at year-end
3. What is par value per share of HM stock at the end of the year
4. Determine the effect of each of the following on total stockholders’ equity: stock, equity split, declaration and payment of cash dividend, declaration and distribution of stock dividend (could be your answer increase decrease or no effect).

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Step 1

(1) Journal entries for the given transactions are as follows:

Step 2

(2) Compute the number of shares outstanding for Company HM at the end of the year:

Step 3

(3) The par value of capital stock of Company HM at the end of the ye...

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