Question

The stockholders’ equity section of Pina Colada Corp. consists of common stock ($10 par) $2,280,000 and retained earnings $595,000. A 10% stock dividend (22,800 shares) is declared when the market price per share is $15. Show the before-and-after effects of the dividend on the following.

(a)		The components of stockholders’ equity.
(b)		Shares outstanding.
(c)		Par value per share.

		Before Dividend		After Dividend
Stockholders’ equity		$		$
Outstanding shares
Par value per share		$		$

Exercise 11-7

Sunland Company purchased from its stockholders 5,000 shares of its own previously issued stock for $240,000. It later resold 1,950 shares for $51 per share, then 1,950 more shares for $46 per share, and finally 1,100 shares for $40 per share.

Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Enter an account title to record purchase from stockholders	Enter a debit amount	Enter a credit amount
Enter an account title to record purchase from stockholders	Enter a debit amount	Enter a credit amount
(To record purchase from stockholders.)
Enter an account title to record sales of shares at $51 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $51 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $51 per share	Enter a debit amount	Enter a credit amount
(To record sales of shares at $51 per share.)
Enter an account title to record sales of shares at $46 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $46 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $46 per share	Enter a debit amount	Enter a credit amount
(To record sales of shares at $46 per share.)
Enter an account title to record sales of shares at $40 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $40 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $40 per share	Enter a debit amount	Enter a credit amount
Enter an account title to record sales of shares at $40 per share	Enter a debit amount	Enter a credit amount
(To record sale of shares at $40 per share.)

Answer 1

B2 X for 1 ДА В Stockholders' equity Outstanding shares Par value per share Before Dividend $ 2,875,000 228,000 $ 10 After Dividend $2,875,000 250,800 $ 10 Exercise 11-7 Account Titles and Explanation Debit Credit $ 240,000 treasury stock cash (To record purchase from stockholders.) $ 240,000 $ 99,450 cash treasury stock paid in capital-treasury stock (To record sales of shares at $51 per share.) $ 93,600 $ 5,850 $ 89,700 $ 3,900 cash paid in capital-treasury stock treasury stock (To record sales of shares at $46 per share.) $ 93,600 cash paid in capital-treasury stock retained earnings treasury stock (To record sale of shares at $40 per share.) $ 44,000 $ 1,950 $ 6,850 $ 52,800

for formulas and calculations, refer to the image below -

In case you have any query, kindly ask in comments.

T : fix 1 Ε Stockholders' equity Outstanding shares Par value per share Before Dividend After Dividend = 2280000+595000 =2280000+595000-(22800*15)+(22800*10)+(22800*5) =2280000/10 =D4*1.1 10 Exercise 11-7 Account Titles and Explanation Debit Credit 240000 treasury stock cash (To record purchase from stockholders.) 240000 cash =1950*51 treasury stock paid in capital-treasury stock (To record sales of shares at $51 per share.) = 240000/5000*1950 =D13-E14 =1950*46 =E20-D18 cash paid in capital-treasury stock treasury stock (To record sales of shares at $46 per share.) =240000/5000*1950 cash paid in capital-treasury stock retained earnings treasury stock (To record sale of shares at $40 per share.) =1100*40 =E15-D19 =E26-D23-D24 = 240000/5000*1100