Question

On January 1, Molini Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a par value of $5 per share. During the year, the following occurred.

• Jan. 5 Issued 25,000 additional shares of common stock for $17 per share.

• April 15 Declared a cash dividend of $1 per share to stockholders of record on April 30.

• May 10 Paid the $1 cash dividend.

• July 15 Declared a 10% stock dividend on 120,000 (95,000 + 25,000) shares to stockholders of record on July 30. The per share par value is $5, book value $15 and market value is $100 per share at the time.

• August 10 Issued the stocks dividends.

• Dec. 1 Issued 2,000 additional shares of common stock for $19 per share.

• Dec. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31. (Notice that number of outstanding shares have changed due to August 10 and December 1 transactions, so, you must take the updated data into account)

Answer 1

Date	Details	Debit	Credit
April 1	Cash (25,000*17)	425,000.00
	Common Stock (25,000*5)		125,000.00
	Paid-in Capital in excess of par (25,000*12)		300,000.00
April 15	Retained Earnings (120,000*1)	120,000.00
	Cash Dividends Payable		120,000.00
May 10	Cash Dividends Payable	120,000.00
	Cash		120,000.00
July 15	Retained Earnings (120,000*10%*100)	1,200,000.00
	Common stock Dividend distributable (12,000*5)		60,000.00
	Paid-in capital in excess of par (12,000-(100-5))		1,140,000.00
August 10	Common stock Dividend distributable	60,000.00
	Common stock		60,000.00
Dec. 1	Cash (2,000*19)	38,000.00
	Common Stock (2,000*5)		10,000.00
	Paid-in capital in excess of par (2,000*14)		28,000.00
Dec. 15	Retained Earnings (134,000*1.20)	160,800.00
	Cash Dividends Payable		160,800.00
	(95,000 + 25,000 + 12,000 + 2,000)