Question

Please do them all in order. thanks!

ACT202: Chapter 13 Home Work Exercises Exercise 13-5: Large Stock Dividend and Stock Split: GIVEN: On June 30, 2017, Sharper Corporation's common stock is priced at $30.50 per share before any stock dividend or split, and the stockholders' equity section of its BS appears as follows: Common stock--$6 par value, 90,000 shares authorized, 216,000 100,000 36,000 shares issued and outstanding Paid-in capital in excess of par value, Common Stock Retained earnings 316,000 632,000 2$ Total Stockholders' Equity Part 1: Complete the table below assuming the company declares and immediately distributes a 100% stock dividend. After Dvidend Adjustment Before Dividend Stock Dividend Common Stock Paid-in Capital in excess of par value Total contributed capital Retained earnings Total stockholders' equity Number of common shares outstanding Part 2: Complete the table below assuming the company implements a 2-for-1 stock split instead of the 100% stock dividend in part 1 above. After Split Béfore Split Adjustment Stock Split Common Stock Paid-in Capital in excess of par value Total contributed capital Retained earnings Total stockholders' equity Number of common shares outstanding

Answer 1

Exercise 13-5

Part 1

Stock Dividend	Before Dividend	Adjustment	After Dividend
Common stock	$         216,000.00	+ $ 216,000	$     432,000.00
Paid-in capital in excess of par value	$         100,000.00	$                   -	$     100,000.00
Total Contributed Capital	$         316,000.00		$     532,000.00
Retained Earnings	$         316,000.00	($216,000)	$     100,000.00
Total Stockholders Equity	$         632,000.00		$     632,000.00
Number of common shares outstanding	36,000	+ 36,000	72,000

Part 2

Stock Split (2 to 1)	Before Dividend	Adjustment	After Dividend
Common stock	$                                      216,000.00	$                 -	$                                      216,000.00
	36,000 shares @ $6 per share		72,000 shares @ $3 per share
Paid-in capital in excess of par value	$                                      100,000.00	$                 -	$                                      100,000.00
Total Contributed Capital	$                                      316,000.00	$                 -	$                                      316,000.00
Retained Earnings	$                                      316,000.00	$                 -	$                                      316,000.00
Total Stockholders Equity	$                                      632,000.00	$                 -	$                                      632,000.00
Number of common shares outstanding	36,000	+ 36,000	72,000

Exercise 13-6

Part 1

Date	Particulars	Dr. Amt ($)	Cr. Amt ($)
5-Feb	Retained Earnings	414,400
	Stock Dividend Distributable		414,400
	(14%*74,000 shares @ $40 per share - market value of share after stock dividend declaration is to be used)
28-Feb	Stock Dividend Distributable	414,000
	Common stock		103,600
	Paid in capital in excess of par value (414,000 - 103600)		310,400
	(10360 shares issued in stock dividend recorded at par value and balance recorded in Additional paid-up capital)

Exercise 13-10

Part 1

Date	Particulars	Dr. Amt ($)	Cr. Amt ($)
11-Oct	Treasury stock	58,000
	Cost of Treasury Stock	133,400
	Cash A/c		191,400
	(5800 shares purchased by the company @ $33 per share)
1-Nov	Cash A/c	46,800
	Treasury Stock		12,000
	Cost of Treasury Stock		34,800
	(1200 shares reissued out of treasury stock @ $39 per share)
25-Nov	Cash A/c	128,800
	Treasury Stock		46,000
	Cost of Treasury Stock		82,800
	(4600 shares reissued out of treasury stock @$28 per share)

Part 2

Stockholder's Equity	Amount
Common stock,$10 par	$         800,000.00
Paid-in capital in excess of par value, Common Stock	$         256,000.00
Total Contributed Capital	$     1,056,000.00
Retained Earnings	$         928,000.00
Total	$     1,984,000.00
Less: Cost of treasury stock (133,400 - 34,800 - 82,800)	(15,800)
Total stockholder's equity	$     1,968,200.00

Exercise 13-18

Part 1

Date	Particulars	Dr. Amt ($)	Cr. Amt ($)
2-Jan	Treasury stock	82,500
	Cash A/c		82,500
	(3300 shares purchased by the organisation @ $25/share i.e. par value)
7-Jan	Retained Earnings	44,550
	Dividend Payable A/c		44,550
	($1.5 per share dividend payable on shares outstanding on 9 Feb i.3. 33000-3300 = 29700 shares)
28-Feb	Dividend Payable	44,550
	Cash		44,550
	(Dividend declared on 7th Jan is paid)
9-Jul	Cash A/c	39,600
	Treasury Stock		33,000
	Paid in capital in excess of par value, treasury stock		6,600
	(1320 shares from treasury stock reissued @ $30 per share)
27-Aug	Cash A/c	33,000
	Paid in capital in excess of par value, treasury stock	6,600
	Cost of Treasury Stock	1,650
	Treasury Stock		41,250
	(1650 shares from treasury stock reissued @ $20 per share)
9-Sep	Retained Earnings	65,340
	Dividend Payable		65,340
	($2 per share dividend payable on shares outstanding as on 22 Sep i.e. 33,000 -3,300 +1,320 +1,650 = 32,670 shares)
22-Oct	Dividend Payable	65,340
	Cash		65,340
	(Dividend declared on 9th Sep is paid)
31-Dec	Income summary A/c	55,000
	Retained Earnings		55,000
	(Transferred net income for the year to retained earnings)

Part 2 and 3

Statement of Retained Earnings for the year ended 31st December 2017	Amount
Opening balance on 1st Jan 2017	350,000
Add: Net income for the year	55,000
Less: Dividends paid	(109,890)
Closing balance as on 31st December 2017	295,110

Stockholder's Equity as on 31st December 2017	Amount
Common stock, $25 par value - 50,000 authorized 33,000 shares issued and outstanding	825,000
Less: Treasury stock at cost	(750)
	824,250
Paid-in capital in excess of par value, Common Stock	66,000
Total Contributed Capital	890,250
Retained Earnings	295,110
Total	1,185,360
Less: Cost of treasury stock	(1,650)
Total stockholder's equity	1,183,710