On January 1, 2020, Blossom Corporation had the following stockholders’ equity accounts.
Common Stock ($20 par value, 50,000 shares issued and outstanding) | $1,000,000 | |
Paid-in Capital in Excess of Par—Common Stock | 190,000 | |
Retained Earnings | 550,000 |
During the year, the following transactions occurred.
Feb. 1 | Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1. | |
Mar. 1 | Paid the dividend declared in February. | |
Apr. 1 | Announced a 2-for-1 stock split. Prior to the split, the market price per share was $35. | |
July 1 | Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $14 per share. | |
31 | Issued the shares for the stock dividend. | |
Dec. 1 | Declared a $0.30 per share dividend to stockholders of record on December 15, payable January 5, 2021. | |
31 | Determined that net income for the year was $300,000. |
Journalize the transactions and the closing entries for net income and dividends.
Date | Account Titles | Debit | Credit | |
Feb-01 | Retained Earnings | $ 50,000 | =50000*1 | |
Cash Dividend Payable | $ 50,000 | |||
(Cash dividend declared) | ||||
Mar-01 | Cash Dividend Payable | $ 50,000 | ||
Cash | $ 50,000 | |||
(Dividend paid in cash) | ||||
Apr-01 | Common Stock ($20 par value, 50,000 shares issued and outstanding) | $ 1,000,000 | ||
Common Stock ($10 par value, 100,000 shares issued and outstanding) | $ 1,000,000 | |||
(Stock split 2 for 1) | ||||
Jul-01 | Retained Earnings | $ 140,000 | =100000*10%*14 | |
Stock Dividend Distributable | $ 100,000 | =100000*10%*10 | ||
Paid-in Capital in Excess of Par—Common Stock | $ 40,000 | =100000*10%*4 | ||
(10% Common Stock Dividend declared) | ||||
Jul-31 | Stock Dividend Distributable | $ 100,000 | ||
Common Stock - $10 par value | $ 100,000 | |||
(Issued common stock for stock dividend) | ||||
Dec-01 | Retained Earnings | $ 30,000 | =100000*0.3 | |
Cash Dividend Payable | $ 30,000 | |||
(Cash dividend declared) | ||||
Dec-31 | Income Summary | $ 300,000 | ||
Retained Earnings | $ 300,000 | |||
(Transferred net income to retained earnings) |
On January 1, 2020, Blossom Corporation had the following stockholders’ equity accounts.
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