Homework Answers
| a. | |||
| Journal entries for the transactions listed in the problem | |||
| Date | Account Title and Explanation | Debit | Credit |
| Feb 1 | Retained Earnings | 48,000 € | |
| Dividend Payable | 48,000 € | ||
| (being dividend declared @ 1 per share for 48000 | |||
| equity share outstanding on the date of declaration) | |||
| Mar 1 | Dividend Payable | 48,000 € | |
| Cash | 48,000 € | ||
| (being the cash dividend declared on Feb 1 paid now) | |||
| Apr 1 | Share Capital - Ordinary | 1,200,000 € | |
| Share Capital - Ordinary | 1,200,000 € | ||
| (being the equity shares split in the ratio of 5 equity | |||
| shares for each equity share outstanding) | |||
| Jul 1 | Retained Earnings | 168,000 € | |
| Dividend Payable | 120,000 € | ||
| Share Premium | 48,000 € | ||
| (being the share dividend declared @ 10% to the | |||
| shareholders on record of July 1 at market value of 7 and | |||
| transferring the excess of market value over book value | |||
| to share premium account - please refer the working | |||
| note) | |||
| Jul 31 | Dividend Payable | 120,000 € | |
| Share Capital | 120,000 € | ||
| (being the equity shares issued against the 10% | |||
| share dividend declared on July 1) | |||
| Dec 1 | Retained Earnings | 105,600 € | |
| Dividend Payable | 105,600 € | ||
| (being the dividend declared at 0.40 per share to 264,000 | |||
| shares held by the shareholders of record on Dec 15 | |||
| payable on Jan 5) | |||
| Working Notes | |||
| Share dividend | |||
| Declaration of share dividend is known as small stock dividend if | |||
| the share dividend is less than 20-25%. Hence, the current | |||
| dividend is classified as small stock dividend. | |||
| In small stock dividend,the accounting entry for the share dividend | |||
| is made at the fair value of the share by entering the par value of | |||
| the share in share capital and the excess of fair value over par | |||
| value in share premium account | |||
| Closing entry for dividend payable and Net Income | |||
| Date | Account Title and Explanation | Debit | Credit |
| Dec 31 | Net Income | 350,000 € | |
| Income Summary | 350,000 € | ||
| (being the income account closed and the balance | |||
| transferred to the Income summary account) | |||
| Date | Account Title and Explanation | Debit | Credit |
| Dec 31 | Income Summary | 321,000 € | |
| Dividend | 321,000 € | ||
| (being the dividend account closed and the balance | |||
| transferred to the Income summary account) | |||
| b. | |||
| Share Capital - Ordinary( E 25 par value) | |||
| Date | Description | Debit | Credit |
| Jan 1 | Beginning balance | 1,200,000 € | |
| Apr 1 |
Transfer to Share Capital ( 5 par value) |
1,200,000 € | |
| 1,200,000 € | 1,200,000 € | ||
| Share Capital - Ordinary( E 5 par value) | |||
| Date | Description | Debit | Credit |
| Apr 1 | Transfer from Share Capital | 1,200,000 € | |
| July 31 | Retained Earnings | 120,000 € | |
| Dec 31 | Ending Balance | 1,320,000 € | |
| 1,320,000 € | 1,320,000 € | ||
| c. | |||
| Equity section as on December 31 | |||
|
Share Capital - Ordinary ( 5 par value, 264,000 issued and outstanding) |
1,320,000 € | ||
| Share Premium - Ordinary | 248,000 € | ||
| Retained Earnings | 628,400 € | ||
| Working notes | |||
| Retained Earnings | |||
| Date | Description | Debit | Credit |
| Jan 1 | Beginning Balance | 600,000 € | |
| Feb 1 | Dividend Payable | 48,000 € | |
| Jul 1 | Dividend Payable | 168,000 € | |
| Dec 1 | Dividend Payable | 105,600 € | |
| Dec 31 | Net Income | 350,000 € | |
| Dec 31 | Ending Balance | 628,400 € | |
| 950,000 € | 950,000 € | ||
| Share Premium | |||
| Date | Description | Debit | Credit |
| Jan 1 | Beginning Balance | 200,000 € | |
| Jul 1 | Retained Earnings | 48,000 € | |
| Dec 31 | Ending Balance | 248,000 € | |
| 248,000 € | 248,000 € | ||
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please help me to solve P12.4
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can you please solve this
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can you please solve this
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Problem 14-03A a-d
On January 1, 2020, Oriole Corporation had the following
stockholders’ equity accounts.
Common Stock (no par value, 88,000 shares issued and
outstanding)
$1,415,000
Retained Earnings
457,000
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 3-for-1 stock split. Prior to the split, the market
price per share was...
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