Question

Homework: Ch 13 Homework Score: 0 of 8 pts P13-38A (similar to) Save 2 of 2 (1 complete) D HW Score: 4.2496, 0.64 of 15 pts EQuestion Help Dearborn Manufacturing Co. completed the tollowing transactions during 2016 (Click the icon to view the transactions) Requirements 1. Record the transactions in Dearbon's general journal 2. Prepare the Dearbom's stockholders equity section of the balance sheet as of December 31. 2016. Assume that Dearborn was authonized to issue 1.500 shares of preferred stock and 500,000 shares of common stock Both preferred stock and common stock were issued at par. The ending balance of retained eamings as or December 31.2016, Is $2,090,000 d More Info Requirement 1. Record the transactions in Dearbon's general jourmal (Record debits frst, then cre required" on the first line of the Accounts and Explanation column and leave the remaining cells blan Jan. 16: Declared a cash dividend on the 5%, $96 par noncumulative preferred stock (950 shares out outstanding. The date of record is January 31, and the payment date is february 15 Declared a cash dividend on the 5% 596 par noncumulative preferred stock (950 shares outstanding). Declared a S0.30 per share dividend on the 105,000 shares of $10 par value common stock outstanding. The date of record is January 31, and the payment date is February 15 Jan. 16 Date Accounts and Explanation Debit Jan. 16 Feb Jun. JUL 15 Paid the cash dividends. 10 Split common stock 2-for-1 30 Declared a 30% stock dividend on the common stock The market value of the common stock was $12 per share Choose from any list or enter any number in the input fields and then click Check Answer Aug. 15 Distributed the stock dividend Oct. 26 Purchased 1.000 shares of treasury stock at $8 per share Nov 8 Sold 500 shares of treasury stock for $10 per share parts remaining 30 Sold 300 shares of treasury stock for $4 per share

Answer 1

a)
Date	Accounts & Explanation	Debit	Credit
Jan.16	Retained Earnings	$      36,060.00
	Dividends Payable—Preferred (5% x $96 x 950 shares)		$      4,560.00
	Dividends Payable—Common ($0.30 * 105000 shares)		$    31,500.00
	(Declared cash dividend )
Feb.15		$        4,560.00
	Dividends Payable—Preferred (5% x $96 x 950 shares)	$      31,500.00
	Dividends Payable—Common ($0.30 * 105000 shares)		$    36,060.00
	Cash
Jun.10	(Paid cash dividend)
	No Journal Entry
	After split common stock = 105000 x 2 = 210,000 shares
Jul.30	Par value = $5
	Retained Earnings (30% x 210,000 x $5)	$   3,15,000.00
Aug.15	Common Stock Dividend Distributable (30% x 210,000 x $5)		$ 3,15,000.00
	(Declared a 30% stock dividend)
Oct.26	Common Stock Dividend Distributable (30% x 210,000 x $5)	$   3,15,000.00
	Common stock		$ 3,15,000.00
	(Issued 30% stock dividend.)
Nov.8
	Treasury Stock (1000 shares x $8)	$        8,000.00
	Cash		$      8,000.00
	(Purchased treasury stock.)
Nov.30	Cash (500 x $10)	$        5,000.00
	Treasury Stock (500 x $8)		$      4,000.00
	Paid-in capital in excess of par		$      1,000.00
	(Sold treasury stock with cost of $8 per share)
b)	Cash (300 x $4)	$        1,200.00
DEARBORN MANUFACTURING CO	Paid-in capital in excess of par	$        1,000.00
Balance Sheet (Partial)	Retained Earnings	$           200.00
December 31, 2016	Treasury Stock (300 x $8)		$      2,400.00
Stockholders’ equity	(Sold treasury stock with cost of $8 per share)
Paid in Capital
5% Preferred stock, $96 par value, noncumulative,   1500 shares authorized, 950 shares issued and outstanding		$      91,200.00
Common Stock—$5 Par Value; 500,000 shares authorized, 273,000 shares issued and 272,800 outstanding		$ 13,64,000.00
Total paid-in capital		$ 14,55,200.00
Retained Earnings		$ 17,38,740.00
Total paid-in capital and   retained earnings		$ 31,93,940.00
Less: Treasury stock (200 common shares)		$      -1,600.00
Total stockholders’ equity		$ 31,92,340.00
Outstanding Shares = 210,000 + 30% x 210,000 - 1000 + 500+300)	272800.00
Retained Earnings = $2090000 -36060 - 315000-200	$                                                                    17,38,740.00