Question

Problem 11-08A (Part Level Submission) On January 1, 2022, Ayayai Corp. had these stockholders' equity accounts. Common Stock ($10 par value, 76,000 shares issued and outstanding) Paid-in Capital in Excess of Par Value Retained Earnings $760,000 491,000 616,000 During the year, the following transactions occurred. Jan. 15 Feb. 15 Apr. 15 May 15 Dec. 1 Dec. 31 Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15. Paid the dividend declared in January. Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $14 per share. Issued the shares for the stock dividend. Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2023. Determined that net income for the year was $372,000.

Answer 1

Ayayai Corporation				-
Date	Account	Debit	Credit	Calculation
15-Jan	Cash Dividends	38,000		=76,000*0.50
	Dividends Payable		38,000
15-Feb	Dividends Payable	38,000
	Cash		38,000
15-Apr	Stock Dividends	106,400		=76,000*10%*14
	Common Stock Dividend Distributable		76,000	=76,000*10%*10
	Paid-in Capital in Excess of Par Value		30,400
15-May	Common Stock Dividend Distributable	76,000
	Common Stock		76,000
1-Dec	Cash Dividends	50,160		=(76,000+7,600)*0.60
	Dividends Payable		50,160
31-Dec	Income Summary	372,000
	Retained Earnings		372,000
31-Dec	Retained Earnings	106,400
	Stock Dividends		106,400
31-Dec	Retained Earnings	88,160		=38,000+50,160
	Cash Dividends		88,160
	Workings
	Cash Dividends
	Opening Shares	76,000
	10% Stock Dividends	7,600		=76,000*10%
	Number of Common Shares Issued	83,600
	Cash Dividend per share	0.60
	Cash Dividend Declared	50,160		=83,600*0.60

Ayayai Corporation T Accounts Date Debit Date Credit Common Stock 1-Jan $ 760,000 15-May $ 76,000 Date Debit Date Credit Paid-in Capital in Excess of Par Value 1-Jan $ 491,000 15-Apr $ 30,400 Date Debit Date Credit Retained Earnings 31-Dec $ 106,400 1-Jan $ 616,000 31-Dec $ 88,160 31-Dec $ 372,000 836,000 Bal. $ Cash Dividends 38,000 50,160 31-Dec $ Bal. $ 521,400 Stock Dividends 15-Apr $ 106,400 31-Dec $ 106,400 Bal. $ 793,440 Common Stock Dividend Distributable 15-May $ 76,000 15-Apr $ 76,000 15-Jan $ 1-Dec $ 88,160 Bal. $ - Bal. $ - Bal. $ -

Ayayai Corporation
Partial Balance Sheet
As of Dec 31, 2022
	31-Dec-22
Stockholders Equity
Paid in Capital
Capital Stock
Common Stock ($10 par value, 83,600 shares issued and outstanding)	836,000
Additional Paid in Capital
Paid-in Capital in Excess of Par Value	521,400
Total Paid in Capital	1,357,400
Retained Earnings	793,440
Total Stockholders Equity	2,150,840