Analyzing and Identifying Financial Statement Effects of Dividends

The stockholders equity of Kinney Company at December 31, 2021, is shown below:

5% preferred stock, $100 par value, 10,000 shares authorized;
Shares issued and outstanding (1)	$350,000
Common stock, $5 par value, 200,000 shares authorized;
Shares issued and outstanding (2)	225,000
Paid-in capital in excess of par valuepreferred stock	36,000
Paid-in capital in excess of par valuecommon stock	270,000
Retained earnings	590,400
Total stockholders equity	$1,471,400

(1) 5,250 shares at $100 par value.

(2) 67,500 shares at $5 par value.

The following transactions, among others, occurred during 2022.

Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $11 per share.

Dec. 7 Declared and issued a 3% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.

Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share.

a. Prepare the journal entries for these transactions.

Date	Account	Debit	Credit
Apr. 1	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	To record 100% stock dividend.
Dec. 7	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	To record 3% stock dividend.
Dec. 20	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	Additional paid-in capitalCashCommon stockRetained earnings		Answer
	To record cash dividend.