menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Entries for selected corporate transactions Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows: Jan. 5. Split the common stock 4 for 1 and reduced the par from $20 to $5 per share. After the split, there were 4,000,000 common shares outstanding. Mar. 10. Purchased 100,000 shares of the corporation’s own common stock at $30, recording the stock at cost. Apr. 30. Declared semiannual dividends of $0.25 on 30,000 shares of preferred stock and $0.08 on the common stock to stockholders of record on May 15, payable on June 15. June 15. Paid the cash dividends. Aug. 20. Sold 60,000 shares of treasury stock at $40, receiving cash. Oct. 15. Declared semiannual dividends of $0.25 on the preferred stock and $0.08 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $35. The dividend date of record is November 15 payable on December 19. Dec. 19. Paid the cash dividends and issued the certificates for the common stock dividend. Instructions Journalize the transactions.

BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 13, Problem 5PA
Textbook Problem
32 views

Entries for selected corporate transactions

Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows:

Jan. 5. Split the common stock 4 for 1 and reduced the par from $20 to $5 per share. After the split, there were 4,000,000 common shares outstanding.

Mar. 10. Purchased 100,000 shares of the corporation’s own common stock at $30, recording the stock at cost.

Apr. 30. Declared semiannual dividends of $0.25 on 30,000 shares of preferred stock and $0.08 on the common stock to stockholders of record on May 15, payable on June 15.

June 15. Paid the cash dividends.

Aug. 20. Sold 60,000 shares of treasury stock at $40, receiving cash.

Oct. 15. Declared semiannual dividends of $0.25 on the preferred stock and $0.08 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $35. The dividend date of record is November 15 payable on December 19.

Dec. 19. Paid the cash dividends and issued the certificates for the common stock dividend.

Instructions

Journalize the transactions.

To determine

Journalize the transactions.

Explanation of Solution

Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.

Treasury Stock: It refers to the shares that are reacquired by the corporation that are already issued to the stockholders, but reacquisition does not signify retirement.

Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.

Stated value: It refers to an amount per share, which is assigned by the board of directors to no par value stock.

Issue of common stock for non-cash assets or services: Corporations often issue common stock for the services received from attorneys or consultants as compensation, or for the purchase of non-cash assets such as land, buildings, or equipment.

Retained earnings statement: This is a financial statement that shows the amount of the net income retained by a company at a particular point of time for reinvestment and pays its debts and obligations. It shows the amount of retained earnings that is not paid as dividends to the shareholders.

Stockholders’ equity: It refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

Journalize the transactions for Corporation ATV.

DateAccount Titles and ExplanationDebit ($)Credit ($)
January 5No entry is required  
 
March10Treasury stock (100,000 shares×$30 per share)3,000,000 
        Cash 3,000,000
  (To record the purchase of 100,000 shares of treasury stock)  
 
April30Cash Dividends                                        (2)                                                        319,500 
       Cash Dividends Payable 319,500
  (To record the declaration of cash dividends)  
 
June 15Cash Dividends Payable                          (2)                                                        319,500 
       Cash  319,500
  (To record the payment of cash dividends)  
 
August 20Cash (60,000 shares × $40 per share)2,400,000 
  

     Treasury stock          

     (60,000 shares×$30 per share)

 1,800,000
  

     Paid-in capital from treasury stock

    ($2,400,000$1,800,000)

 600,000
  (To record sale of treasury stock for above the cost price)  
 
October15Cash Dividends                                        (4)                                                        324,300 
       Cash Dividends Payable 324,300
  (To record the declaration of cash dividends)  
 
October15Stock Dividends                                       (6)1,386,000 
  

    Common Stock Dividends Distributable                           

                                                                  (7)

 198,000
  

    Paid-in Capital in excess of Stated 

    Value-Common stock                          (8)

 1,188,000
  (To record the declaration of stock dividends)  
 
December19Cash Dividends Payable                         (3)                                                        324,300 
       Cash  324,300
  (To record the payment of cash dividends)  
 
December1Common Stock Dividends Distributable (7)                                198,000 
      Common Stock 198,000
  (To record the distribution of stock dividends)  

Working notes:

(1)

Compute number of common shares outstanding after the purchase of treasury stock on March 10.

Number of shares outstandingafter the purchase of treasury stockon March 10}=[Number of shares outstandingas of January 5  Numberof treasury shares purchasedon March 10]=4,000,000 shares 100,000 shares=3,900,000 shares

(2)

Compute the amount of total cash dividends declared on April 30

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 13 Solutions

Financial Accounting
Show all chapter solutions
add
Ch. 13 - Dividends per share Reinhardt Furniture Company...Ch. 13 - Dividends per share Zero Calories Company has...Ch. 13 - Entries for issuing stock On May 23, Stoltz Realty...Ch. 13 - Entries for issuing stock On January 22, Zentric...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Entries for stock dividends Pro-Builders...Ch. 13 - Entries for stock dividends Antique Buggy...Ch. 13 - Entries for treasury stock On January 31,...Ch. 13 - Entries for treasury stock On May 27, Hydro...Ch. 13 - Reporting stockholders equity Using the following...Ch. 13 - Reporting stockholders equity Using the following...Ch. 13 - Retained earnings statement Rockwell Inc. reported...Ch. 13 - Retained earnings statement Noric Cruises Inc....Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Earnings per share Financial statement data for...Ch. 13 - Dividends per share Imaging Inc., a developer of...Ch. 13 - Dividends per share Lightfoot Inc., a software...Ch. 13 - Entries for issuing par stock On October 31,...Ch. 13 - Entries for issuing no-par stock On February 12,...Ch. 13 - Issuing stock for assets other than cash On April...Ch. 13 - Selected stock transactions Alpha Sounds Corp., an...Ch. 13 - Issuing stock Willow Creek Nursery, with an...Ch. 13 - Issuing stock Work Place Products Inc., a...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Entries for stock dividends Senior Life Co. is an...Ch. 13 - Effect of stock split Copper Grill Restaurant...Ch. 13 - Effect of cash dividend and stock split Indicate...Ch. 13 - Selected dividend transactions, stock split...Ch. 13 - Treasury stock transactions Lava Lake Inc. bottles...Ch. 13 - Treasury stock transactions Lawn Spray Inc....Ch. 13 - Treasury stock transactions Biscayne Bay Water...Ch. 13 - Reporting paid-in capital The following accounts...Ch. 13 - Stockholders Equity section of balance sheet The...Ch. 13 - Stockholders Equity section of balance sheet...Ch. 13 - Retained earnings statement Sumter Pumps...Ch. 13 - Stockholders Equity section of balance sheet List...Ch. 13 - Statement of stockholders equity The stockholders...Ch. 13 - EPS Junkyard Arts, Inc., had earnings of 316,000...Ch. 13 - EPS Pacific Gas and Electric Company is a large...Ch. 13 - EPS Caterpillar Inc. and Deere Company are two...Ch. 13 - Dividends on preferred and common stock Pecan...Ch. 13 - Stock transactions for corporate expansion On...Ch. 13 - Selected stock transactions The following selected...Ch. 13 - Entries for selected corporate transactions Morrow...Ch. 13 - Entries for selected corporate transactions...Ch. 13 - Dividends on preferred and common stock Yosemite...Ch. 13 - Stock transaction for corporate expansion Pulsar...Ch. 13 - Selected stock transactions Diamondback Welding ...Ch. 13 - Entries for selected corporate transactions Nav-Go...Ch. 13 - Entries for selected corporate transactions West...Ch. 13 - Ethics in Action Tommy Gunn is a division manager...Ch. 13 - Ethics in Action Lou Hoskins and Shirley Crothers...Ch. 13 - Communication Motion Designs Inc. has paid...Ch. 13 - Ethics in Action Bernie Ebbers, the CEO of...Ch. 13 - Issuing stock Epstein Engineering Inc. began...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
Explain why product extension and refinement are important.

Foundations of Business (MindTap Course List)

Identify the five steps in the revenue recognition model.

Intermediate Accounting: Reporting And Analysis

Financial Statements and Taxes Donna Jamison, a 2009 graduate of the University of Florida with 4 years of bank...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

List the five steps taken to prepare a work sheet.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Explain the role of activity drivers in assigning costs to products.

Cornerstones of Cost Management (Cornerstones Series)