Question

Problem 14-01A a-c (Video) On January 1, 2020, Cullumber Corporation had the following stockholders' equity accounts. Common Stock ($24 par value, 59,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Earnings $1,416,000 197,000 559,000 During the year, the following transactions occurred. Feb. 1 Declared a $3 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 $39. July 1 Declared a 15% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the marke 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.60 per share dividend to stockholders of record on December 15, payable January 5, 2021. 31 Determined that net income for the year was $332,500. Journalize the transactions and the closing entries for net income and dividende select "No Entry" for the account titles and enter Date

Answer 1

Date	Account Title and explanation	Debit	Credit
1-Feb	Cash Dividends (59,000 shares x $3)	$177,000
	Dividends Payable - Common		$177,000
	To record cash dividends declared
1-Mar	Dividends Payable - Common	$177,000
	Cash		$177,000
	To record cash dividend paid
1-Jul	No journal entry is required
	A 2-for-1 stock split increases number of shares to 118,000 (59,000 × 2)
	and reduces the par value of share to $12
1-Jul	Stock Dividends (118,000 x 15% x $14)	$247,800
	Common Stock Dividends Distributable (118,000x15%x$12)		$212,400
	Paid-in Capital in Excess of Par-Common Stock		$35,400
	To record stock dividend declared
31-Jul	Common Stock Dividends Distributable (118,000 x15%x$12)	$212,400
	Common Stock - $12 Par		$212,400
	To record stock dividend distributed
Dec. 1	Cash Dividends (118,000+17,700 x $0.60)	$81,420
	Dividends Payable - Common		$81,420
	To record cash dividends declared
Dec. 31	Income Summary	$332,500
	Retained Earnings		$332,500
	To close net income to retained earnings
Dec. 31	Retained Earnings	$247,800
	Stock Dividends		$247,800
	To close stock dividends to retained earnings
Dec. 31	Retained Earnings	$258,420
	Cash dividends (177,000 +81,420)		$258,420
	To close cash dividends to retained earnings

Requirement 2: Post the entries as follows
Common Stock
Date	Explanation Ref.	Debit	Credit	Balance
1-Jan	Balance			$1,416,000
1-Apr	2 for 1 split - new par $12
31-Jul			$212,400	$1,628,400
Common Stock Dividends Distributable
Date	Explanation Ref.	Debit	Credit	Balance
1-Jul			$212,400	$212,400
May. 15		$212,400		$0
Paid - in Capital in Excess of Par - Common
Date	Explanation Ref.	Debit	Credit	Balance
Jan. 1	Balance			$197,000
1-Jul			$35,400	$232,400
Retained Earnings
Date	Explanation Ref.	Debit	Credit	Balance
Jan. 1	Balance			$559,000
31-Dec	Net income		$332,500	$891,500
31-Dec	Stock dividend	$247,800		$643,700
31-Dec	Cash dividend	$258,420		$385,280
Cash Dividend
Date	Explanation Ref.	Debit	Credit	Balance
1-Feb		$177,000		$177,000
1-Dec		$81,420		$258,420
31-Dec			$258,420	$0
Stock Dividend
Date	Explanation Ref.	Debit	Credit	Balance
1-Jul		$247,800		$247,800
31-Dec			$247,800	$0

Requirement 3 :
CULLUMBER CORPORATION
Balance Sheet (Partial)
31-Dec-20
Stockholders' Equity:
Paid-in capital
Common stock, $12 par value, 135,700 shares
issued and outstanding	$1,628,400
Additional paid-in capital
in excess of par - common stock	$232,400
Total paid-in capital	$1,860,800
Retained Earnings	$385,280
Total stockholders' equity	$2,246,080