Question

Prepe Stock P11.4A (LO 3,4) On January 1, 2020, Geffrey Corporation had the following stockholders' equity accounts. Common Stock ($20 par value, 60,000 shares issued and outstanding) $1,200,000 Paid-in Capital in Excess of Par-Common Stock 200,000 Retained Earnings 600,000

Answer 1

a)

Date	Account	Debit	Credit
Feb. 1	Cash Dividends	60000
	Dividends payable		60000
Mar. 1	Dividends payable	60000
	Cash		60000
Apl. 1	No Entry (two –for-one split increase number of shares to (60,000 x 2=120,000)
	No Entry
July. 1	Stock Dividends	156000
	Common Stock Dividends Distributable		120000
	Paid-on Capital in excess of par value		36000
July. 31	Common Stock Dividends	120000
	Distributable Common stock		120000
Dec. 1	Retained Earnings	66000
	Dividends Payable		66000
Dec. 31	Income Summary	350000
	Retained Earnings		350000

b)

Common Stock
Date	Explanation	Debit	Credit	Balance
Jan. 1	Balance			1200000
Apr. 1	2 for 1 Split-new (Par $ 10)		120000	1320000
July 31
Common Stock- Dividends Distributable
Date	Explanation	Debit	Credit	Balance
July. 1	Stock Dividend declared		120000	120000
July 31	Stock dividend distributed	120000		0
Paid-In Capital in Excess of Par Value
Date	Explanation	Debit	Credit	Balance
Jan. 1	Balance			200000
July 31	Adjusting		36000	236000
Retained Earnings
Date	Explanation	Debit	Credit	Balance
Jan. 1	Balance			600000
Feb. 1	Cash Dividend	60000		540000
July. 1	Stock Dividend	156000		384000
Dec. 1	Cash Dividend	66000		318000
Dec. 31	Net Income		350000	668000

c)

GEFFREY CORPORATION
Balance Sheet (Partial)
December 31, 2020
Stockholders' Equity
Paid-in Capital
Capital Stock
Common Stock	1320000
Additional Paid-in Capital
In excess of par value	236000
Total paid-in capital	1556000
Retained earnings	668000
Total stockholders’ equity	2224000