Question

ASSUMON Ladebook ORION Downloadable eTextbook nment Practice Problem 1 (Part Level Submission) On January 1, 2020, Blossom Corporation had the following stockholders' equity accounts. Common Stock ($20 par value, 50,000 shares issued and outstanding) Pald-in Capital in Excess of Par-Common Stock Retained Earnings $1,000,000 190,000 550,000 During the year, the following transactions occurred. Feb. 1 Declared a $1 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 $35. July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $14 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.30 per share dividend to stockholders of record on December 15, payable January 5, 2021 31 Determined that net income for the year was $300,000. (a) (b) Your answer is partially correct. Try again Enter the beginning balances, and post the entries to the stockholders' equity accounts. (Note: Open additional stockholders' equity accounts as needed.) (Post Journal entries presented in the previous part.) 9 M

Answer 1

Journal Entry Date Feb. 1 Credit Debit $50,000 (50000 x $1] Account Title Cash Dividend Dividend Payable (To record dividend declaration) Dividend Payable $50,000 Mar. 1 $50,000 Cash $50,000 Apr. 1 July. 1 $1,40,000 [((50000x2)x10%) x $14] $1,00,000 [((50000x2)x10%) x $10] $40,000 [((50000x2)x10%) x $4] July. 31 $1,00,000 $1,00,000 (To record dividend payment) No Entry Required No Entry Required (No entry required for stock split) Stock Dividend Common Stock Dividend Distributable Paid in Capital in excess of Par-Common Stock (To reocrd stock dividend declaration) Common Stock Dividend Distributable Common Stock (To reocrd issue of stock dividend) Cash Dividend Dividend Payable (To record dividend declaration) Income Summary Retained Earnings (To close the net income) Retained Earnings Cash Dividend Stock Dividend (To close the dividend account) Dec. 31 $33,000 [(50000x2)x10% x $0.30] $33,000 Dec. 31 $3,00,000 $3,00,000 Dec. 31 $2,23,000 $83,000 $1,40,000

Debit Common Stock Date Jan 1 2020 July 31, 2020 Explanation Balance Stock Dividend Credit Balance $10,00,000 $1,00,000 $11,00,000 Ref Debit Common Stock Dividend Distributable Date Explanation July 1, 2020 Declaration of Stock Dividend July 31, 2020 Issue of Stock Credit $1,00,000 $1,00,000 Balance $1,00,000 $2,00,000 Ref Debit Credit Paid in Capital in excess of Par-Common Stock Date Explanation Jan 1 2020 Balance July 1, 2020 Stock Dividend Balance $1,90,000 $2,30,000 $40,000 Ref Debit Credit Retained Earings Date Jan 1 2020 Dec 31, 2020 Dec 31, 2020 Dec 31, 2020 Explanation Balance Net Income Stock Dividend Cash Dividend $3,00,000 Balance $5,50,000 $8,50,000 $7,10,000 $6,27,000 $1,40,000 $83,000 Ret Credit Cash Dividend Date Feb 1, 2020 Dec 31, 2020 Dec 31, 2020 Explanation Dividend Declared Dividend Declared Trf to Retained Earnings Debit $50,000 $33,000 Balance $50,000 $83,000 $0 $83,000 Ref Credit Stock Dividend Date July 1, 2020 Dec 31, 2020 Explanation Dividend Declared Trf to Retained Earnings Debit $1,40,000 Balance $1,40,000 $1,40,000