Question

On January 1, 2017, Thomson Inc. had the following account balances in its shareholders' equity accounts.

                       

                        Common stock, $1 par, 350,000 shares issued of

                        which 20,000 Shares being held as treasury stock           $350,000  

                        Paid-in capital excess of par, common                               500,000  

                        Preferred stock, $100 par, 10,000 shares outstanding     1,000,000  

                        Paid-in capital excess of par, preferred                              100,000  

                        Retained earnings                                                             2,000,000  

                        Treasury stock, at cost, 20,000 shares                                              60,000  

                                               

During 2017, Thomson Inc. had several transactions relating to common stock.

2/10	Declared a property dividend, payable in Welch company stock. The Welch stock had been purchased early in 2016 for $30,000 and was reported as an asset at a fair value of $35,000 on 12/31/16 balance sheet. The market value of Welch stock is $38,000 on 2/10/17.
3/17	Distributed the property dividend.
3/20	Reissued 5,000 shares of treasury stock at $5 per share.
4/17	Declared a 3 for 1 stock split on common stock effective 4/24.
7/18	Declared and distributed a 10% stock dividend on   outstanding common stock; market value per share, $7.
11/1	Declared a $0.5 per share cash dividend on the outstanding common shares.
11/25	Ex-dividend date for the cash dividend
11/29	Date of record for the cash dividend.
12/20	Paid the cash dividend declared on 11/1.

                        Required:

Record the above transactions and events in the journal entry format.

Answer 1

Date Account titles and explanation 2/10 Investments 2017 Debit Remarks Credit [$38,000 $35,000] $3,000 $3,000 Gain on Appreciation of Investments (To record appreciation of investments at fair market value) Retained Earnings $38,000 [Using appreciated value of the Investments] Property Dividend Payable To record property dividends declared Property Dividend Payable $38,000 3/17 $38,000 [Ref: 2/10 entry --> Distributed now] $38,000 Investments (To record distribution of pro dividends declared 3/20 Caskh $25,000 [5,000 shares x $5] [5,000 shares x ($60,000/20,000)] Balancing figure] (# of common shares outstanding increased to 335,000 After stock dividend, number of common shares outstanding will increase from 335,000 to 1,005,000 shares $15,000 $10,000 Treasury Stock Paid in Capital in excess of Stated value Treasury (To record sale of treasury stock) 4/17 No entry (3-for-1 stock-split. (330,000+5,000) x 3 -1,005,000 shares outstanding)

7/18 $703,500 [1,005,000 shares x 10% x $7] [1,005,000 shares x 10% x $1] Balancing figure] (# of common shares outstanding increased to 1,105,500 [1,105,500 shares x $1 x $0.50] Retained Earnings (or Dividends) $100,500 $603,000 Common Stock Paid-in-Capital in Excess of Par - Common (To record distributed stock dividends declared) Retained Earnings (or Dividends) 11/1 $552,750 Dividends Payable To record cash dividends declared $552,750 11/25 No Entry 11/29 No Entry 12/20 Dividends Payable Cash [Ref: 11/1 entry->Paid off now] $552,750 $552,750 To record payment of cash dividends declared alread