Question

The equity sections from Fields Group's 2016 and 2017 year-end balance sheets follow Stockholders' Equity (December 31, 2016) Common stock-$4 par value, 150,000 shares authorized, 60,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings 240,000 36,000 200,000 $476,000 Total stockholders' equity Stockholders' Equity (December 31, 2017) Common stock-$4 par value, 150,000 shares authorized, 66,720 shares issued, 4,000 shares in treasury $266,880 76,320 360,000 703,200 32,000 $671,200 Paid-in capital in excess of par value, common stock Retained earnings ($32,000 restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during year 2017. Jan. 5 Declared a $2.40 per share cash dividend, payable on January 10 Mar. 20 Purchased treasury stock for cash. Apr. 5 Declared a $2.40 per share cash dividend, payable on April 10 July 5 Declared a $2.40 per share cash dividend, payable on July 10 July 31 Declared a 12% stock dividend when the stock's market value was $10 per share. Aug. 14 Issued the stock dividend that was declared on July 31. Oct. 5 Declared a $2.40 per share cash dividend, date of record October 10 General Journal Cash Dividends Stock Dividend General Requirement Ledger General Ledger tab Prepare journal entries for each transaction

Prepare the journal entry necessary to record each event,and then agree the year-end balances with the December 31, 2017 Stockholders' Equity statement given above.

Answer 1

a)

Date	Account title	Debit	credit
Jan 5	Cash dividend	144000
	cash dividend payable (60000*2.4)		144000
Jan 10	cash dividend payable	144000
	cash		144000
mar 20	Treasury stock	32000
	cash		32000
Apr 5	cash dividend	134400
	cash dividend payable [60000-4000treasury stock]*2.4		134400
Apr 10	cash dividend payable	134400
	cash		134400
July 5	cash dividend	134400
	cash dividend payable		134400
July 10	cash dividend payable	134400
	cash		134400
July 31	Stock dividend (6720*10)	67200
	Common stock distributable (6720*4)		26880
	paid in capital in excess of par -common stock		40320
Aug 14	Common stock distributable	26880
	common stock		26880
oct 5	cash dividend	150528
	cash dividend payable (62720*2.4)		150528
oct 10	cash dividend payable	150528
	cash		150528
Dec 31	Retained earning	630528
	cash dividend		563328
	stock dividend		67200
	[To close dividend]

**shares outstanding at time of stock dividend : 60000-4000=56000

stock dividend : 56000*12% = 6720 shares

**shares outstanding after stock dividend = 56000+6720 = 62720

2)

	Number of shares issued	Common stock	Paid in capital	Retained earning	Treasury stock	Total
Beginning value	60000	240000	36000	200000	0	476000
Treasury stock repurchased					32000	(32000)
Cash dividend				(563328)		(563328)
stock dividend	6720	26880	40320	(67200)		0
Net income				790528   (balancing figure)
Total	66720	266880	76320	360000	32000	671200