Dearborn Manufacturing, Co. completed the following transactions during 2014: Jan. 16 Declared a cash dividend on the

Question:

Dearborn Manufacturing, Co. completed the following transactions during 2014:

Jan. 16 Declared a cash dividend on the 6%, $ 95 par noncumulative preferred stock (1,000 shares outstanding). Declared a $ 0.55 per share dividend on the 90,000 shares of $ 10 par value common stock outstanding. The date of record is January 31, and the payment date is February 15.

Feb. 15 Paid the cash dividends.

Jun. 10 Split common stock 2-for-1.

Jul. 30 Declared a 30% stock dividend on the common stock. The market value of the common stock was $ 12 per share.

Aug. 15 Distributed the stock dividend.

Oct. 26 Purchased 3,000 shares of treasury stock at $ 10 per share.

Nov. 8 Sold 1,500 shares of treasury stock for $ 11 per share.

30 Sold 700 shares of treasury stock for $ 7 per share.

Requirements

1. Record the transactions in Dearborn’s general journal.

2. Prepare the Dearborn’s stockholders’ equity section of the balance sheet as of December 31, 2014. Assume that Dearborn was authorized to issue 4,000 shares of preferred stock and 400,000 shares of common stock. Both preferred stock and common stock were issued at par. The ending balance of retained earnings as of December 31, 2014, is $ 2,020,000.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...