a.
Date | Account title and explanation | Debit | Credit |
Feb 1 | Retained earnings [60,000 x $1] | $60,000 | |
Dividends payable | $60,000 | ||
[Declared cash dividends] | |||
Mar 1 | Dividends payable | $60,000 | |
Cash | $60,000 | ||
[Paid cash dividends] | |||
Apr 1 | No entry for stock-split | ||
July 1 | Retained Earnings | $156,000 | |
Common Stock dividend distributable [12,000 x $10] | $120,000 | ||
Paid-in Capital in Excess of Par-Common [12,000 x $3] | $36,000 | ||
[Declared stock dividends] | |||
July 31 | Common Stock dividend distributable | $120,000 | |
Common stock | $120,000 | ||
[Paid stock dividends] | |||
Dec 31 | Retained earnings | $66,000 | |
Dividends payable [132,000 x $0.50] | $66,000 | ||
[Declared cash dividends] | |||
Dec 31 | Income summary | $350,000 | |
Retained earnings | $350,000 | ||
[To close income summary account] |
b.
Common stock | |||
Beg. | $1,200,000 | ||
July 31 | $120,000 | ||
End. | $1,320,000 | ||
Paid-in capital in excess of par-common stock | |||
Beg. | $200,000 | ||
July 1 | $36,000 | ||
End. | $236,000 | ||
Retained earnings | |||
Feb 1 | $60,000 | Beg. | $600,000 |
July 1 | $156,000 | Dec 31 | $350,000 |
Dec 31 | $66,000 | ||
End. | $668,000 |
c.
Kristen Corporation | |
Balance Sheet (partial) | |
For the year ended December 31,2012 | |
Stockholder's equity : | |
Common stock $10 par, 132,000 shares issued and outstanding | $1,320,000 |
Paid-in capital in excess of par-common | $236,000 |
Total paid in capital | $1,556,000 |
Retained earnings | $668,000 |
Total stockholder's Equity | $2,224,000 |
Calculations:
Outstanding Common shares |
|
Beginning | 60,000 |
Stock split | 1:02 |
Shares after stock split (60,000 x 2) | 120,000 |
Stock dividend (120,000 x 10%) | 12,000 |
Shares after stock dividend | 132,000 |
*Upon stock split, par value is decreased to $10.
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