# Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000 shares of $100 par value 8% cumulative preferred stock. It is also authorized to issue 750,000 shares of$6 par value common stock. It has issued 50,000 of the common shares and 1,000 of the cumulative preferred shares. The corporation has never declared a dividend and the preferred shares are one years in arrears. Aggregate Mining has the following transactions this year: Journalize these transactions. For the stock split, show the calculation for how many shares are outstanding after the split and the par value per share after the split

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 14, Problem 9PA
Textbook Problem
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## Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000 shares of $100 par value 8% cumulative preferred stock. It is also authorized to issue 750,000 shares of$6 par value common stock. It has issued 50,000 of the common shares and 1,000 of the cumulative preferred shares. The corporation has never declared a dividend and the preferred shares are one years in arrears. Aggregate Mining has the following transactions this year:Journalize these transactions. For the stock split, show the calculation for how many shares are outstanding after the split and the par value per share after the split

To determine

To journalize:

The transactions relating to the declaration and payment of dividend.

Introduction:

Profits of the company are distributed as dividends to the stockholders of the company. Dividends can be distributed in the form of cash, stock, or property.

### Explanation of Solution

Record declaration of dividend:

 Date Account Debit($) Credit($) March, 1 Retained Earnings 20,000 Cash Dividends Payable 20,000 (To record the declaration of a cash dividend)

Table (1)

• Retained Earnings is a capital account and it is decreased by $20,000. Therefore, Retained Earnings account is debited with$20,000.
• Cash Dividends Payable is a liability and it is increased by $20,000. Therefore, Cash Dividends Payable account is credited with$20,000.

Record payment of dividend:

 Date Account Debit($) Credit($) March 30 Cash Dividends Payable 20,000 Cash 20,000 (To record the payment of dividend)

Table (2)

• Cash Dividends Payable is a liability and it is decreased by $20,000. Therefore, Cash Dividends Payable account debited with$20,000.
• Cash is an asset and it is decreased by $20,000. Therefore, Cash account credited with$20,000.

Record split of share:

 Date Account Debit($) Credit($) July 10 Common Stock (50,000×\$6) 300,000 <

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