Question

On January 1, 2022, Martinez Corp. had these stockholders' equity accounts. 

Common Stock ($10 par value, 69,000 shares issued and outstanding) $690,000 

Paid-in Capital in Excess of Par Value 484,000 

Retained Earnings 640,000 

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 $14 per share. 

May 15 Issued the shares for the stock dividend. 

Dec. 1 Declared a $0.70 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 $358,000.

Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.) (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) 

Answer 1

Date	Account Titles and Explanation	Debit	Credit		Cash Dividends
					1/15	$27,600	12/31	$80,730
Apr 15	Stock Dividends	$96,600			12/1	$53,130	12/31 Bal.	-
	Common Stock Dividends Distributable		$69,000
	Paid-in Capital in Excess of Par Value - Common Stock		$27,600
					Common Stock Dividends Distributable
					5/15	$69,000	4/15	$69,000
							12/31 Bal.	-
					Stock Dividends
					4/15	$96,600	12/31	$96,600
							12/31 Bal.	-
Payout ratio =	Cash dividend for common shareholders/Net income avail to Common Shareholders
=	($27,600 + $53,130) / $358,000
=	22.55%