Question

On January 1, 2022, Swifty Corporation had these stockholders’ equity accounts. Common Stock ($10 par value, 75,500 shares issued and outstanding) $755,000 Paid-in Capital in Excess of Par Value 490,500 Retained Earnings 611,000 During the year, the following transactions occurred. Jan. 15 Declared a $0.40 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $16 per share. May 15 Issued the shares for the stock dividend. Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2023. Dec. 31 Determined that net income for the year was $371,000. Journal Entries

Answer 1

Date	Account title	Debit	Credit
Jan. 15	Cash dividend (or) Retained earnings	30200
	Dividend payable (75,500x$0.40)		30200
Feb. 15	Dividend payable	30200
	Cash		30200
Apr. 15	Stock dividend (or) Retained earnings (7,550x$16)	120800
	Common stock dividend distributable (7,550 x $10)		75500
	Paid in capital in excess of par value		45300
May. 15	Common stock dividend distributable	75500
	Common stock		75500
Dec. 1	Cash dividend (or) Retained earnings	41525
	Dividend payable ((75,500+7,550)x$0.50)		41525
Dec. 31	Income summary	371,000
	Retained earnings		371,000
	(To close net income)