Question

The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2017: Paid-in capital: Preferred stock, 7.5%, 92,000 shares at $1 par Common stock, 424,280 shares at $1 par Paid-in capital-excess of par, preferred Paid in capital-excess of par, common Retained earnings Treasury stock, at cost; 4,200 common shares Total shareholders' equity 92,000 424, 20e 1,535,000 2,585,000 9, 145, eee (46,200) $13,735,869 During 2018, several events and transactions affected the retained earnings of Consolidated Paper Required: 1. Prepare the appropriate entries for these events. a. On March 3 the board of directors declared a property dividend of 260,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $498,000). The investment shares had a fair value of $2 per share and were distributed March 31 to shareholders of record March 15. b. On May 3 a 5-for 4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share. c. On July 5 a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share d. On December 1 the board of directors declared the 75% cash dividend on the 92.000 preferred shares, payable on December 28 to shareholders of record December 20. e. On December 1 the board of directors declared a cash dividend of $0.60 per share on its common shares, payable on December 28 to shareholders of record December 20. 2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Inc., at December 31, 2018. Net Income for the in connnnn

Answer 1

credit Mar-3 $22.000 $520000 000 $ 2000 Answers D Journal entries 1.Dale particulars - LF Debit Investment in Leasco Al or $22,000 To Gain on revaluation of investment in Leasco |(260000*$)-$ 498,000) Being record gain on vevaluation Relained earnings Ale or $520,000 To properly dividend payable (260,000x52] Being property dividend declared] properly dividend payable ale or $52 6. To Investment in Leasco Being properly dividend distributed May 3 Relained earnings Ale Do $105000 To common stock [C42H,200-4,200) 25%? Being stock split in the form of stock dividend Relained earnings (199000+92000) en $ 56,320 s common stock (420,000+92000)x1%*$1,3 $5120 To paid in capital excess Apar - common Being stock dividerd declared and distributed Retained earnings Alc (92000x7,57] $6900 TO Preferred dividend payable Being preferred dividond declared] $105.000 Julys con $61440 | Dec 11 46,900 Deckt! $6900 $ 6,900 preferred dividend payable con Tocoste. Being preferred dividend paid? Retajued earnings Ale [H20000+92000 + 5120] To common dividend payable common dividend decayed] |$513120 bec-1 $517,120

bec-28 $ 517, 120 common dividend payable Alept . To cashe eing common dividend paid ) $517,120 2) Balance sheet particulars Amount preferred stock 757, 92ooo shares at $1 par $92000 common stocle 424200 shares at $/ $521320 1424200+92000+5120] $1595000 paid in capital - excess of pas, preferred paid incapital - excess of pas- common *2672000 (2585000+92000] $8759,660 195000- 520000-105000-56320-6900-517120 + 820000] Treasury stocke 1446200) $13,538,7801 L slöcke holders Equity Relained earnings