Question

The stockholders' equity section of Apples balance sheet as of December 31, 2018 is as follows: Stockholders' Equity - Preferred Stock, 4% $100 par value, 100,000 shares authorized and 5000 shares issued and outstanding = $500,000 - Common stock, $10 par value; authorized, 2,000,000 shares auth; issued and outstanding 60,000 shares = $600,000 - Paid-in capital in excess of par = $850,000 - Retained earnings = $4,000,000 to The following events occurred during 2019: Jan. 5: 20,000 shares of authorized and unissued common stock were sold for $19 per share. Jan. 16: Declared a cash dividend of 10 cents per share on the common stock, payable February 9 stockholders of record on February 5. Feb. 9: Paid the dividend declared on Jan. 16 Feb. 20: 30,000 shares of authorized and unissued common stock were sold for $22 per share. Mar. 1: A 10% stock dividend was declared. Market value per share is currently $24. Apr. 1: The common stock dividend that was declared on March 1 was issued. Jul. 1: 2,000 shares of Treasury Stock was purchased at $30 per share. Sept. 1: 1,000 shares of Treasury Stock were sold for $32 per share. Dec. 31: The preferred dividend was declared and a common dividend of 50 cents a share was declared. Dec. 31: Income for the year was $575,000

Answer 1

Requirement 1 Journal Date Particulars Jan-05 Cash (20000*19) Common Stock (20000*10) Paid-in Capital in excess of par (20000*9) (To record issue of common stock for cash) (in $) Debit 380,000 (in $) Credit 200,000 180,000 Jan-16 8,000 Cash Dividends (80000*0.10) Dividends Payable (To record cash dividend declared) 8,000 Feb-09 8,000 8,000 Feb-20 660,000 Dividends Payable Cash (To record cash dividend paid) Cash (30000*22) Common Stock (20000*10) Paid-in Capital in excess of par (30000*12) (To record issue of common stock for cash) Stock Dividends (110000*10%*24) Dividends Payable (To record stock dividend declared) 300,000 360,000 Mar-01 264,000 264,000 Apr-01 264,000 Dividends Payable Common Stock (11000*10) Paid-in Capital in excess of par (11000*14) (To record stock dividend issued) 110,000 154,000 Jul-01 60,000 60,000 Sep-01 Treasury Stock (2000*30) Cash (To record purchase of treasury stock) Cash (1000*32) Treasury Stock (1000*30) Paid-in Capital in excess of par (1000*2) (To record re-issue of treasury stock) 32,000 30,000 2,000 Dec-31 80,000 Cash Dividends (500000*4%)+(120000*0.50) Dividends Payable (To record cash dividend declared) 80,000 Dec-31 575,000 Income Summary Retained Earnings (To record closure of income summary balance) 575,000 Dec-31 352,000 Retained Earnings Cash Dividends (8000+80000) Stock Dividends (To close dividend account) 88,000 264,000

Requirement 2 Dr Date Particulars in $ Preferred Stock Date Jan-01 500,000 500,000 Particulars Balance b/d Cr in $ 500,000 Dec-31 Balance c/d Total Total 500,000 Dr Date Particulars Common stock in $ Date Jan-01 Jan-05 Feb-20 Apr-01 1,210,000 1,210,000 Particulars Balance b/d Cash Cash Dividend Payable Cr in $ 600,000 200,000 300,000 110,000 Dec-31 Balance c/d Total Total 1,210,000 Dr Date Particulars Paid-in Capital in excess of par in $ Date Jan-01 Jan-05 Feb-20 Apr-01 1,546,000 Sep-01 1,546,000 Particulars Balance b/d Cash Cash Dividend Payable Cash Total Cr in $ 850,000 180,000 360,000 154,000 2,000 1,546,000 Dec-31 Balance c/d Total Dr Date Particulars Jan-01 Balance b/d Jul-01 Cash Total Treasury Stock in $ Date Sep-01 60,000 Dec-31 60,000 Particulars Cash Balance c/d Total Cr in $ 30,000 30,000 60,000 Dr Date Particulars Dec-31 Cash Dividends Retained Earnings in $ Date 276,450 Jan-01 Dec-31 1,560,750 1,837,200 Particulars Balance b/d Income Summary Cr in $ 1,307,200 530,000 Dec-31 Balance c/d Total Total 1,837,200 Dr Cr in $ Date Jan-16 Particulars Particulars Dividends Payable Dividends Payable Total Cash Dividends in $ Date 8,000 80,000 Dec-31 88,000 Dec-31 Retained Earnings Total 88,000 88,000 Dr Date Particulars Mar-01 Dividends Payable Cr in $ Particulars Stock Dividends in $ Date 264,000 Dec-31 264,000 Retained Earnings Total 264,000 264,000 Total

$ 500,000 Requirement 3 APPLES Partial Balance Sheet 31-Dec-19 Stockholders' Equity Paid-in Capital Capital Stock Preferred Stock, 4% $100 par value, 100000 shares authorized 5000 shares issued and outstanding Common Stock, $10 par value; 2,000,000 shares authorized 121,000 shares issued and outstanding Total Capital Stock Additional Paid-in capital Paid-in capital in excess of par Total Additional paid-in capital Total paid-in capital Retained Earnings Total Paid-in capital and Retained Earnings Less- Treasury Stock Total Stockholders' equity $ 1,210,000 $ 1,710,000 $ 1,546,000 $ $ $ S $ $ 1,546,000 3,256,000 1,560,750 4,816,750 (30,000) 4,786,750 Requirement 4 242000 No. of common stock outstanding as on Dec 31, 2019 if 2 for 1 stock split is declared- (121000*2) of $ 5 par value