Advanced Life Co. is an HMO for businesses in the Albuquerque area. The following account balances appear on the balance sheet of Advanced Life Co.: Common stock (290,000 shares authorized; 7,000 shares issued), $25 par, $175,000; Paid-in capital in excess of par common stock, $21,000; and Retained earnings, $1,575,000. The board of directors declared a 2% stock dividend when the market price of the stock was $32 a share. Advanced Life Co. reported no income or loss for the current year.

a1. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value. If an amount box does not require an entry, leave it blank.

	Stock Dividends	fill in the blank 02345500d046077_2	fill in the blank 02345500d046077_3
	Stock Dividends Distributable	fill in the blank 02345500d046077_5	fill in the blank 02345500d046077_6
	Paid-In Capital in Excess of Par-Common Stock	fill in the blank 02345500d046077_8	fill in the blank 02345500d046077_9

a2. Journalize the entry to record the issuance of the stock certificates. If an amount box does not require an entry, leave it blank.

	Stock Dividends Distributable	fill in the blank 6df45e023ffcfe9_2	fill in the blank 6df45e023ffcfe9_3
	Common Stock	fill in the blank 6df45e023ffcfe9_5	fill in the blank 6df45e023ffcfe9_6

b. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

Total paid-in capital	$fill in the blank e3469701f05ffc1_1
Total retained earnings	$fill in the blank e3469701f05ffc1_2
Total stockholders' equity	$fill in the blank e3469701f05ffc1_3

c. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

Total paid-in capital	$fill in the blank e3469701f05ffc1_4
Total retained earnings	$fill in the blank e3469701f05ffc1_5
Total stockholders' equity	$fill in the blank e3469701f05ffc1_6

Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $20,000; Year 2, $60,000; Year 3, $95,000; Year 4, $115,000; Year 5, $140,000; and Year 6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, 2% preferred stock, $100 par, and 100,000 shares of common stock, $5 par.

Required:

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Preferred Dividends

Common Dividends

Year

Total Dividends

Total

Per Share

Total

Per Share

Year 1

$ 20,000

$fill in the blank 1

$fill in the blank 2

$fill in the blank 3

$fill in the blank 4

Year 2

60,000

fill in the blank 5

fill in the blank 6

fill in the blank 7

fill in the blank 8

Year 3

95,000

fill in the blank 9

fill in the blank 10

fill in the blank 11

fill in the blank 12

Year 4

115,000

fill in the blank 13

fill in the blank 14

fill in the blank 15

fill in the blank 16

Year 5

140,000

fill in the blank 17

fill in the blank 18

fill in the blank 19

fill in the blank 20

Year 6

180,000

fill in the blank 21

fill in the blank 22

fill in the blank 23

fill in the blank 24

$fill in the blank 25

$fill in the blank 26

2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

Average annual dividend for preferred	$fill in the blank 27 per share
Average annual dividend for common	$fill in the blank 28 per share

3. Assuming a market price per share of $133 for the preferred stock and $11 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share (a) for preferred stock and (b) for common stock. Round your answers to two decimal places.

Preferred stock	fill in the blank 29 %
Common stock	fill in the blank 30 %