Question

Problem 14-3A Excel Spreadsheet Template Journalizing dividend and share. repurchase transactions, report- ing shareholders' equity 2. Total shareholders' equity, $435,000 The balance sheet of Gaitree Ltd. at December 31, 2016, reported 250,000 common shares authorized, with 75,000 shares issued and a Common Shares balance of $187,500. Retained Earnings had a credit balance of $150,000. During 2017, the company completed the follow- ing selected transactions: Mar. 15 Repurchased 10,000 of the company's own common shares at $2.75 per share. Apr. 29 Declared a 5 percent stock dividend on the 65,000 outstanding common shares to holders of record on May 2, with distribution set for May 16. The market value of Gaitree Ltd. common shares was $6.00 per share. May 16 Issued the stock dividend shares. Dec. 19 Split the common shares 2 for 1 by issuing one new share for each old share held on December 30, 2017 31 Earned net income of $125,000 during the year. 822 Part 3 Accounting for Partnerships and Corporate Transactions

Answer 1

1-
date	explanation	debit	credit
15-Mar	treasury stock	27500
	cash		27500
29-Apr	retained earning	19500
	stock dividend payable		19500
16-May	stock dividend payable	19500
	common stock		8125
	additional paid in capital		11375
19-Dec	common stock	195625
	common stock-2 for 1		195625
statement of retained earning
beginning balance		150000
less stock dividend		-19500
net income		125000
year end balance in retained earning		255500
2-
statement of shareholders equity
common stock	195625
additional paid in capital-common stock	11375
less treasury stock	27500
total paid in capital		179500
retained earning		255500
total of shareholders equity		435000
3-
average issue price	total of shareholders equity/no. of common stock outstanding	435000/(75000+3250-10000)	6.37
shares issued as stock dividend	65000*5%	3250