Question

Problem 14-01A a-c (Video) On January 1, 2020, Oriole Corporation had the following stockholders' equity accounts. Common Stock ($26 par value, 52,500 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,365,000 191,000 579,000 During the year, the following transactions occurred. Feb. 1 Declared a $2 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 $39. 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 $15 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.40 per share dividend to stockholders of record on December 15, payable January 5, 2021. 31 Determined that net income for the year was $357,500

Answer 1

Credit Oriole Corporation Date Account 1-Feb Cash Dividends Dividends Payable Debit 105,000 Calculation =52,500*2 105,000 105,000 1-Mar Dividends Payable Cash 105,000 1-Apr No Entry In 2 for 1 split, no. of shares doubles to 105,000 (52,500*2) & par value per share halves to $13 ($26/2) 157,500 1-Jul Stock Dividends Common Stock Dividend Distributable Paid in Capital in Excess of Par-Common Stock =10,500*15 =10,500*13 136,500 21,000 136,500 31-Jul Common Stock Dividend Distributable Common Stock 136,500 46,200 Below wkgs 1-Dec Cash Dividends Dividends Payable 46,200 357,500 31-Dec Income Summary Retained Earnings 357,500 157,500 31-Dec Retained Earnings Stock Dividends 157,500 151,200 =105,000+46,200 31-Dec Retained Earnings Cash Dividends 151,200 Workings Cash Dividends Opening Shares Stock Split - 2 for 1 Subtotal 10% Stock Dividend Number of Common Shares Issued Cash Dividend per share Cash Dividend Declared 52,500 52,500 105,000 10,500 115,500 0.40 46,200 =105,000*10% =115,500*0.40

Balance Balance Oriole Corporation T Accounts Date Explanation Debit Credit Common Stock 1-Jan Balance 31-Jul Stock dividends issued $ 136,500 Paid in Capital in excess of Par-Common Stock 1-Jan Balance 1-Jul Stock dividends declared $ 21,000 $136,500 $1,365,000 $1,501,500 $ 191,000 $ 212,000 Date Explanation Debit Credit Common Stock Dividend Distributable 1-Jul Stock dividends declared $ 136,500 31-Jul Stock dividends issued $ 136,500 Retained Earnings 1-Jan Balance 31-Dec Net income $ 357,500 31-Dec Stock Dividends $ 157,500 31-Dec Cash Dividends $ 151,200 Stock Dividends 1-Jul Stock dividends declared $157,500 31-Dec Stock Dividends closed to RE $157,500 $579,000 $936,500 $ 779,000 $627,800 Cash Dividends 1-Feb Cash dividends declared $ 105,000 1-Dec Cash dividends declared $ 46,200 31-Dec Cash Dividends closed to RE $ 105,000 151,200 $ $ 157,500 $ - $ - $ 151,200

Oriole Corporation Balance Sheet (Partial) December 31, 2020 Stockholders Equity Paid in Capital Capital Stock Common Stock Additional Paid in Capital Paid in Capital in Excess of Par - Common Stock Total Paid in Capital Retained Earnings Total Stockholders Equity 1,501,500 212,000 1,713,500 627,800 2,341,300