On January 1, 2017, Belgium Industries SA had the following equity accounts. Share Capital-Ordinary (4 par value,
Question:
On January 1, 2017, Belgium Industries SA had the following equity accounts.
Share Capital-Ordinary (€4 par value, 250,000 shares issued and outstanding)....€1,000,000
Share Premium-Ordinary........................................................................200,000
Retained Earnings..................................................................................840,000
During the year, the following transactions occurred.
Jan. 15 Declared a €1 cash dividend per share to shareholders of record on January 31, payable February 15.
Feb. 15 Paid the dividend declared in January.
Apr. 15 Declared a 10% share dividend to shareholders of record on April 30, distributable May 15. On April 15, the market price was €11 per share.
May 15 Issued the shares for the share dividend.
July 1 Announced a 2-for-1 share split. The market price per share prior to the announcement was €12. (The new par value is €2.)
Dec. 1 Declared a €0.50 per share cash dividend to shareholders of record on December 15, payable January 10, 2018.
31 Determined that net income for the year was €264,000.
Instructions
(a) Journalize the transactions and the closing entries for net income and dividends.
(b) Enter the beginning balances, and post the entries to the equity accounts. (Note: Open additional equity accounts as needed.)
(c) Prepare an equity section at December 31.
DividendA 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,...
Step by Step Answer:
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso