On January 1, 2011, Galactica Corporation had the following stockholders equity accounts. Common Stock ($20 par value,

Question:

On January 1, 2011, Galactica Corporation had the following stockholders’ equity accounts.

Common Stock ($20 par value, 60,000 shares issued and

outstanding) ............... $1,200,000

Paid-in Capital in Excess of Par Value ..... 200,000

Retained Earnings ............. 500,000

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 5-for-1 stock split. Prior to the split, the market price per share was $35.

July 1 Declared a 5% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $7 per share.

July 31 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.50 per share dividend to stockholders of record on December 15, payable January 5, 2012.

31 Determined that net income for the year was $380,000.

Instructions

(a) Journalize the transactions and closing entries.

(b) Enter the beginning balances and post the entries to the stockholders’ equity accounts.

Corporation
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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,...