Question

Prepare dividend entries and stockholders' equity section. P14.1A (LO 1,2) Financial Statement On January 1, 2020, Geffrey Corporation had the following stockholders' equity accounts. GLS 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 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 2-for-1 stock split. Prior to the split, the market price per share was $36. July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $13 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.50 per share dividend to stockholders of record on December 15, payable January 5, 2021. 31 Determined that net income for the year was $350,000. Instructions a. Journalize the transactions and the closing entries for net income and dividends. b. Enter the beginning balances, and post the entries to the stockholders' equity accounts. (Note: Open additional stockholders' equity accounts as needed.) c. Prepare a stockholders' equity section at December 31. c. Total stockholders' equity $2,224,000

Answer 1

60,000 Aprilist I General Journal Debit (6) Credit ($) Febist Retained earnings 60,000 Diridends Payable ($1X60,009 60,000 (Being dividend declared) March 1st Dividends Payable 60,000 (Being dividends paid) (Note-1) July 1st Retained Earnings (12000x13) 156,000 Common stock Dividenda (12000X10) 120,000 Paid in capital in exces of par 36,000 Value (1200083) (Being announcedo a 2-for-1 Stock split and declared 10% dividend). ist common stock Dindends Distributable 120,000 - Common stock 120,000 (being shares issued for stock dindend) Decost Retained Earnings (139000X0:5) 66,000 Dindends Payable 66,000 (Being $0.50 per share dividend is declared) Dec 31st Income Summary 359000 Retained tarnings 350,000 (Being the net income of $350,000 determined on December 31st).

1999 2 (Note 1) : en announced - afort - Hock split which will increase see member of shares to 100,000ế (60,000 x 2): This will reduce the par value to $10pes thare. 3 e Common stock Afc. Date Particulars Debit beedit Balance. Ton 1st opening balance 1, 200,000 April ist dfori stock splet. 1 (new par value-$10) 1 20000 1,380,000 July 31st ) Common stock Dindends Distributable. Date Particulars Debit Credit Balance. July ist (stockoblit amounted) 120,000 120,000 31st (shares issued for stock , - Paid in Capital in Excent of Par Value. Date Particulars. Debit Credit Bolance. Jon 1st opening Balance . 200000 36,000 July ist (stock split announced) 236,000 dindend) 120,000

Debit • - 3 - Retained Earnings Date Particular Jan 1st opening Balance Feb 1st Cash dividend paid July 1st stock dividend issued Cash dividend paid Dec 31st Ondeug Motincome given beedit Balance. 600.000 540,000 384000 318,000 350,000 668.000 60,000 156,000 66,000 0 0 0 0 0 0 0 0 0 Particulars Stock holder's equity U T | 1,320000 Geffrey Corporation Stock holders equity at December 31st. Amount ($) Paid in capital Capital stock Common stock, $10 par Value, 132000 share issued and outstanding Additional paid in capital In excess of par Value - Total paid in capital Addt Retained earnings 236,000 1,556,000 668,000 $2,224,000 Total stockholder' equity The total amount of stockholder's equity at December - 31st is $2,224,000