The stockholders’ equity of Cyclone Corporation at January 1 follows: 6 Percent preferred stock, $10 par value, 40,000 shares authorized; 25,000 shares issued and outstanding $250,000 Common stock, $1 par value, 300,000 shares authorized; 80,000 shares issued and outstanding 80,000 Paid-in capital in excess of par value—Common stock 560,000 Retained earnings 830,000 Total Stockholders’ Equity $1,720,000 The following transactions, among others, occurred during the year
The stockholders’ equity of Cyclone Corporation at January 1 follows: 6 Percent preferred stock, $10 par value, 40,000 shares authorized; 25,000 shares issued and outstanding $250,000 Common stock, $1 par value, 300,000 shares authorized; 80,000 shares issued and outstanding 80,000 Paid-in capital in excess of par value—Common stock 560,000 Retained earnings 830,000 Total Stockholders’ Equity $1,720,000 The following transactions, among others, occurred during the year
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...
Related questions
Question
The
6 Percent |
|
25,000 shares issued and outstanding | $250,000 |
Common stock, $1 par value, 300,000 shares authorized; 80,000 shares | |
issued and outstanding | 80,000 |
Paid-in capital in excess of par value—Common stock | 560,000 |
830,000 | |
Total Stockholders’ Equity | $1,720,000 |
The following transactions, among others, occurred during the year:
June | 18 | Declared a 60 percent stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share. |
July | 1 | Issued the stock dividend declared on June 18. |
Dec. | 20 | Declared the annual cash dividend on the preferred stock and a cash dividend of $1.60 per share on the common stock, payable on January 20 to stockholders of record on December 28. |
Required
a. Prepare
General Journal | |||
---|---|---|---|
Date | Description | Debit | Credit |
Jun.18 | Answer | Answer | Answer |
Answer | Answer | Answer | |
Declared stock dividend. | |||
Jul.1 | Answer | Answer | Answer |
Answer | Answer | Answer | |
Issued common shares as stock dividend. | |||
Dec.20 | Answer | Answer | Answer |
Answer | Answer | Answer | |
Dividends Payable - Common Stock | Answer | Answer | |
Declared a cash dividend on preferred and common stock outstanding. |
b. Prepare a statement of retained earnings. The net income for the year is $410,000.
Do not use negative signs with your answers.
CYCLONE CORPORATION Statement of Retained Earnings For the Year Ended December 31 |
|||
---|---|---|---|
Retained Earnings, January 1 | Answer | ||
Answer | Answer | ||
Answer | |||
Answer | Answer | ||
Stock Dividends Declared | Answer | Answer | |
Answer | Answer |
Expert Solution
Step 1
Requirement a.General journal
Date
|
Description
|
Debit
|
Credit
|
June 18
|
Stock dividend
|
$48,000
|
|
|
Stock dividends distributable
|
|
$48,000
|
|
( Declared stock dividend)
|
|
|
Jul.1
|
Stock dividend distributable
|
$48,000
|
|
|
Common stock
|
|
$48,000
|
|
(Issued common shares as stock dividend)
|
|
|
Dec. 20
|
Cash dividends
|
$219,800
|
|
|
Dividend Payable- Preferred stock
|
|
$15,000
|
|
Dividend Payable-common stock(80,000 *1.60 +48,000*1.60)
|
|
$204,800
|
|
(Declared a cash dividend on preferred and comon stock outstanding)
|
|
|
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