On January 1, 2012, Jason Corporation had these stockholders equity accounts. Common Stock ($20 par value, 80,000

Question:

On January 1, 2012, Jason Corporation had these stockholders’ equity accounts.

Common Stock ($20 par value, 80,000 shares issued and outstanding) ....$1,600,000

Paid-in Capital in Excess of Par Value .................240,000

Retained Earnings .........................750,000

During the year, the following transactions occurred.

Feb. 1 Declared a $0.50 cash dividend per share to stockholders of record on February 15, payable March 1.

Mar. 1 Paid the dividend declared in February.

July 1 Declared a 15% stock dividend to stockholders of record on July 15, distributable

July 31. On July 1, the market price of the stock was $25 per share.

31 Issued the shares for the stock dividend.

Dec. 1 Declared a $1 per share dividend to stockholders of record on December 15, payable January 5, 2013.

31 Determined that net income for the year was $500,000. The market price of the common stock on this date was $32.

Instructions

(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

(b) Enter the beginning balances and post the entries to the stockholders’ equity T accounts.

(d) Calculate the payout ratio and return on common stockholders’ equity ratio.

Common Stock
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