Question
chapter 18 -- question 10 -- prebuilt--Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (5,000,000
chapter 18 -- question 10 -- prebuilt--Part C
On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (5,000,000 shares authorized, 3,000,000 shares issued, and 2,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation.
On November 1, 2018, the Nicklaus Corporation declares a $0.14 per share cash dividend on common stock and a $0.31 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018.
On December 2, 2018, the Nicklaus Corporation declares a 2% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 112,000 (0.02 x 5,600,000) additional shares being issued to shareholders.
Required:
- Prepare journal entries to record the declaration and payment of these stock and cash dividends.
- Prepare the December 31, 2018, shareholders equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,550,000).
- Prepare a statement of shareholders equity for Nicklaus Corporation for 2018
| Nicklaus Corporation Balance Sheet Shareholders Equity Section December 31, 2018 | |
| Shareholders equity |
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| Total shareholders equity |
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| Nicklaus Corporation Statement of Shareholders Equity For the Year Ended Dec. 31, 2018 ($ in 000s) | |||||||
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| Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Shareholders Equity |
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| Jan 2, 2018 |
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| Issuance of preferred stock |
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| Issuance of common stock |
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| Purchase of treasury stock |
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| Sale of treasury stock |
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| Net income |
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| Common cash dividends |
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| Preferred cash dividends |
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| Stock dividend |
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| December 31, 2018 | 0 | 0 | 0 | 0 | 0 | 0 |
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College Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Deanna C. Martin, Jill E. Mitchell
1st Edition
119-40600-6, 978-1119405962
