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Common Dividends Thompson Payroll Service began in 2019 with 1,500,000 authorized and 820,000 issued and outstanding S8 par common shares. During 2019, Thompson entered into the following transactions: Declared a S0.20 per-share cash dividend on March 24. Paid the S0.20 per-share dividend on April 6. Repurchased 13,000 common shares for the treasury at a cost of S12 each on May 9. Sold 2,500 unissued common shares for $15 per share on June 19. Declared a $0.40 per-share cash dividend on August 1. Paid the $0.40 per-share dividend on September 14. Declared and paid a 10% stock dividend on October 25 when the market price of the common stock was $15 per share. Declared a 50.45 per-share cash dividend on November 20. Paid the $0.45 per-share dividend on December 20. Required: Prepare journal entries for each of these transactions. (Note: Round to the nearest dollar.) What is 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.

BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter 10, Problem 85PSB
Textbook Problem

Common Dividends

Thompson Payroll Service began in 2019 with 1,500,000 authorized and 820,000 issued and outstanding S8 par common shares. During 2019, Thompson entered into the following transactions:

  1. Declared a S0.20 per-share cash dividend on March 24.
  2. Paid the S0.20 per-share dividend on April 6.
  3. Repurchased 13,000 common shares for the treasury at a cost of S12 each on May 9.
  4. Sold 2,500 unissued common shares for $15 per share on June 19.
  5. Declared a $0.40 per-share cash dividend on August 1.
  6. Paid the $0.40 per-share dividend on September 14.
  7. Declared and paid a 10% stock dividend on October 25 when the market price of the common stock was $15 per share.
  8. Declared a 50.45 per-share cash dividend on November 20.
  9. Paid the $0.45 per-share dividend on December 20.

Required:

  1. Prepare journal entries for each of these transactions. (Note: Round to the nearest dollar.)
  2. What is the total dollar amount of dividends (cash and stock) for the year?
  3. CONCEPTUAL CONNECTION Determine the effect on total assets and total stockholders’ equity of these dividend transactions.

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Chapter 10 Solutions

Cornerstones of Financial Accounting
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Are dividends in arrears reported among the...Ch. 10 - 29. What arc retained earnings?Ch. 10 - 30. How may a corporations retained earnings be...Ch. 10 - 31. When arc prior period adjustments used?Ch. 10 - 32. Distinguish between retained earnings and...Ch. 10 - 33. Describe the statement of changes in...Ch. 10 - 34. How are dividend payout and profitability...Ch. 10 - Which of the following is not a component of...Ch. 10 - Which of the following statements is true? 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