Journal Entries (amount in millions)
1. Bank A/c Dr. $ 80
To Common Stock $ 2
To Additional paid in cap, common $ 78
2. Treasury A/c Dr. $ 29.70
To Bank A/c $ 29.70
3. Retained Earnings Dr. $ 26.775
To Common Stock $ 0.765
To Additional paid in cap, common $ 26.01
(Outstanding shares as on April 10 = 4 million + 2 million - 900,000 = 5.1 million shares
Dividend declared = 5.1 million shares * 15% * $ 35 = $26.775 million)
4. Bank A/c Dr. $ 7.8
To Treasury stock $ 6.6
To Retained Earnings $ 1.2
5. (a) Retained Earnings A/c Dr. $ 16
To Dividend Payable $ 16
(b) Dividend Payable A/c Dr. $ 16
To Bank $ 16
6. Equity shares outstanding as on December 1 = 4 million + 2 million - 900,000 + 200,000 = 5.3 million shares
Total Dividend declared and paid = $ 16 million
Dividend per share = $ 16 million / 5.3 million shares = $ 3.019 per share
7. Shareholders Equity Section
Preferred Stock (1,000,000 shares outstanding at $ 25 per share) | $ 25 |
Additional paid in cap, preferred | $ 5 |
Common Stock (6,000,000 shares outstanding at $ 1 per share) | $ 6 |
Additional paid in cap- common (116 + 78 +26.01) | $ 220.01 |
Retained earnings (75 + 7 - 26.775 + 1.2 -16) | $ 40.425 |
Treasury Stock | ($ 23.10) |
Accumulated other comprehensive income (50 - 4.50) | $ 45.50 |
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