Journalizing dividends and treasury stock transactions and preparing the stockholders’ equity section of the balance sheetDeerborn Manufacturing Co. completed the following transactions during 2018:RequirementsRecord the transactions in Deerborn’s general journal.Prepare the Deerborn’s stockholders’ equity section of the balance sheet as of December 31, 2018. Assume that Deerborn was authorized to issue 2,600 shares of preferred stock and 400,000 shares of common stock. Both preferred stock and Common stock were issued at par. The ending balance of retained earnings as of December 31, 2018, is $2,060,000. Jan. 16 Declared a cash dividend on the 6%, $103 par noncumulative preferredstock (1,050 shares outstanding). Declared a $0.20 per share dividend onthe 100,000 shares of $2 par value common stock outstanding. The dateof record is January 31, and the payment date is February 15.Feb. 15 Paid the cash dividends.Jun. 10 Split common stock 2-for-1.Jul. 30 Declared a 30% stock dividend on the common stock. The market valueof the common stock was $9 per share.Aug. 15Distributed the stock dividend.Oct. 26Purchased 1,000 shares of treasury stock at $8 per share.Nov. 8Sold 500 shares of treasury stock for $10 per share.30Sold 300 shares of treasury stock for $4 per share.

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Answered: Jan. 16 Declared a cash dividend on the…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 13E

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Journalizing dividends and treasury stock transactions and preparing the stockholders’ equity section of the balance sheet

Deerborn Manufacturing Co. completed the following transactions during 2018:

Requirements

Record the transactions in Deerborn’s general journal.
Prepare the Deerborn’s stockholders’ equity section of the balance sheet as of December 31, 2018. Assume that Deerborn was authorized to issue 2,600 shares of preferred stock and 400,000 shares of common stock. Both preferred stock and Common stock were issued at par. The ending balance of retained earnings as of December 31, 2018, is $2,060,000.

Jan. 16 Declared a cash dividend on the 6%, $103 par noncumulative preferred
stock (1,050 shares outstanding). Declared a $0.20 per share dividend on
the 100,000 shares of $2 par value common stock outstanding. The date
of record is January 31, and the payment date is February 15.
Feb. 15 Paid the cash dividends.
Jun. 10 Split common stock 2-for-1.
Jul. 30 Declared a 30% stock dividend on the common stock. The market value
of the common stock was $9 per share.
Aug. 15
Distributed the stock dividend.
Oct. 26
Purchased 1,000 shares of treasury stock at $8 per share.
Nov. 8
Sold 500 shares of treasury stock for $10 per share.
30
Sold 300 shares of treasury stock for $4 per share.

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