EX 13-22 Selected dividend transactions, stock split
Selected transactions completed by Gene’s Boating Corporation during the current fiscal year are as follows:
Feb. 10. Split the common stock 3 for 1 and reduced the par from $60 to $20 per share. After the split, there were 300,000 common shares outstanding.
May 1. Declared semiannual dividends of $2.00 on 40,000 shares of preferred stock and $0.12 on the common stock payable on June 15.
June 15. Paid the cash dividends.
Nov. 1. Declared semiannual dividends of $2.00 on the preferred stock and $0.08 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $28.
Dec. 15. Paid the cash dividends and issued the certifi cates for the common stock dividend.
Journalize the transactions.
Answer:
Feb. 10 No entry required. The stockholders’ ledger would be revised to record
the increased number of shares held by each stockholder.
May 1 Cash Dividends .................................................... 116,000*
Cash Dividends Payable ................................ 116,000
*[(40,000 shares × $2) + (300,000 shares
× $0.12)] = $80,000 + $36,000 = $116,000
June 15 Cash Dividends Payable...................................... 116,000
Cash................................................................. 116,000
Nov. 1 Cash Dividends .................................................... 104,000*
Cash Dividends Payable ................................ 104,000
*[(40,000 shares × $2) + (300,000 shares
× $0.08)] = $80,000 + $24,000 = $104,000
1 Stock Dividends ................................................... 168,000**
Stock Dividends Distributable (6,000 × $20) 120,000
Paid-In Capital in Excess of
Par—Common Stock ...................................... 48,000
**(300,000 shares × 2% × $28) = $168,000
Dec. 15 Cash Dividends Payable...................................... 104,000
Cash................................................................. 104,000
15 Stock Dividends Distributable ............................ 120,000
Common Stock ............................................... 120,000
Feb. 10. Split the common stock 3 for 1 and reduced the par from $60 to $20 per share. After the split, there were 300,000 common shares outstanding.
May 1. Declared semiannual dividends of $2.00 on 40,000 shares of preferred stock and $0.12 on the common stock payable on June 15.
June 15. Paid the cash dividends.
Nov. 1. Declared semiannual dividends of $2.00 on the preferred stock and $0.08 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $28.
Dec. 15. Paid the cash dividends and issued the certifi cates for the common stock dividend.
Journalize the transactions.
Answer:
Feb. 10 No entry required. The stockholders’ ledger would be revised to record
the increased number of shares held by each stockholder.
May 1 Cash Dividends .................................................... 116,000*
Cash Dividends Payable ................................ 116,000
*[(40,000 shares × $2) + (300,000 shares
× $0.12)] = $80,000 + $36,000 = $116,000
June 15 Cash Dividends Payable...................................... 116,000
Cash................................................................. 116,000
Nov. 1 Cash Dividends .................................................... 104,000*
Cash Dividends Payable ................................ 104,000
*[(40,000 shares × $2) + (300,000 shares
× $0.08)] = $80,000 + $24,000 = $104,000
1 Stock Dividends ................................................... 168,000**
Stock Dividends Distributable (6,000 × $20) 120,000
Paid-In Capital in Excess of
Par—Common Stock ...................................... 48,000
**(300,000 shares × 2% × $28) = $168,000
Dec. 15 Cash Dividends Payable...................................... 104,000
Cash................................................................. 104,000
15 Stock Dividends Distributable ............................ 120,000
Common Stock ............................................... 120,000
