Use the following to answer questions 13 - 17KMC Corp.'s management is considering either a 100%stock dividend or a 2-for-1 stock split.Complete the following chart to assist in answering thefollowing:After 2-for-1Stock Dividend Stock SplitAfter 100%BeforeCommon stock, $0.50 par value $250,000Additional paid-in capital25,000,000Total paid-in capital25,250,000Retained Earnings500,000Total stockholders' equity$25,750,000Shares outstanding500,000Par value per share$0.50Share price$250.0013.$what amount is in Total paid-in capital account?After the 100% stock dividend14.After the 100% stock dividendwhat amount is in the retained earnings account?15.2$After the 100% stock dividend whatis the par valuepershare?$amount is in Total paid in capital account?16.After the 2-for-1 stock split what$the17.After the 2-for-1 stock split what isshare?par valueper L.Mar Issue 5,000 additional shares of preferred stock fors102.50 per share1-AprIssue 100,000 additional shares of common stock forIs25.00 реr shareDeclare a cash dividend on both common and1-Jun preferred stock of $0.75 per share to all stockholdersof record on June 15.30-Jun Pay the cash dividend declared on June 1.LAve Repurchase (buy) 50,000 shares of common treasurystock for $26.00 per shareLo Resell 40,000 shares of treasury stock purchased onAugust 1 for $26.50 per share31-Dec Net income for the year was $750,000The beginning balances are shown below. Complete theStockholders' EquityStatement ofusing the aboveinformation:AdditionalTotalPaid-inСapitalStockholders'EquityPreferredCommonRetainedTreasuryStockStockStockEarningsBeginning balance20XC$1,000,000$80,000$7,600,000$1,200,000so$9,880,000Issuance of stockNet income for the yearLess: DividendsPurchase Treasury stockResell Treasury stockEnding balance 20XC6.2$When the shares were issued onMarch 1, how much did additional paid in capitalincrease?On August 1st when the shares wereequity7.repurchased,decrease?how muchdid stockholders'8.2$On August 1st when the shares wererepurchased, how much did net income decrease?9.$On October 1st when the 40,000shares were resold, how much did additional paid incapital change (if decrease put "-“ in front of thenumber)?On June 1st when the dividendwas declared, how much did retained earning decrease?10.$11.$Compute ending retained earningson December 31st.12.$Compute ending stockholdersequity on December 31st.

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College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 9SPA

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Preferred Dividends Eastern Inc.s equity includes 8%, $25 par preferred stock. There are 100,000 shares authorized and 45,000 shares outstanding. Assume that Eastern declares and pays preferred dividends quarterly. Required: Prepare the journal entry to record declaration of one quarterly dividend. Prepare the journal entry to record payment of the one quarterly dividend.
STOCK DIVIDENDS Kaufman Company currently has 200,000 shares of 1 par common stock outstanding. On March 15, a 10% stock dividend was declared to shareholders of record on April 2, distributable on April 14. Market value of the common stock was estimated at 5 per share. 1. Prepare journal entries for the declaration and distribution of the 10% common stock dividend. 2. Assume Kaufman Company declared a stock dividend of 30% rather than 10%. Prepare journal entries for the declaration and distribution of the 30% common stock dividend.
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
COMMON AND PREFERRED CASH DIVIDENDS Ramirez Company currently has 100,000 shares of 1 par common stock outstanding and 5,000 shares of 50 par preferred stock outstanding. On July 10, the board of directors declared a semiannual dividend of 0.30 per share on common stock to shareholders of record on August 1, payable on August 5. On July 15, the board of directors declared a semiannual dividend of 5 per share on preferred stock to shareholders of record on August 5, payable on August 10. Prepare journal entries for the declaration and payment of the common and preferred stock cash dividends.
Entries for stock dividends Alpine Energy Corporation has 1,500,000 shares of 40 par common stock outstanding. On August 2, Alpine Energy declared a 4% stock dividend to be issued October 8 to stockholders of record on September 15. The market price of the stock was 70 per share on August 2. Journalize the entries required on August 2, September 15, and October 8.
STOCK SPLIT Goldstein Company has 100,000 shares of 10 par common stock outstanding. On July 1, the board of directors declared a two-for-one stock split. Prepare a memorandum entry in the general journal indicating the new par value and the total number of outstanding shares of common stock.

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