Common Dividends Pumpkin Accounting Corp. began the year with 1,000,000 authorized and 232,000 issued and outstanding $10 par common shares. During the year, Pumpkin entered into the following transactions: a. Declared a $0.40 per-share cash dividend on March 10. b. Paid the $0.40 per-share dividend on April 10. c. Repurchased 8,000 common shares at a cost of $24 each on May 2. d. Sold 3,000 unissued common shares for $26 per share on June 9. e. Declared a $0.55 per-share cash dividend on August 10. f. Paid the $0.55 per-share dividend on September 10. g. Declared and paid a 10% stock dividend on October 15 when the market price of the common stock was $28 per share. h. Declared a $0.60 per-share cash dividend on November 10. i. Paid the $0.60 per-share dividend on December 10 . 1. Prepare journal entries for each of these transactions. If an amount box does , the nearest dollar. 1. a. Declared Dividends: Dividends become an obligation to the company on the date of declaration. b. Paid Dividends: The obligation incurred at the date of declaration is retired when the dividends are paid. c. When purchasing its own previously issued stock, corporations record a reduction to stockholders' equity for the purchase amount of the treasury stock. d. Issued shares of common stock: When companies sell common or preferred stock to raise capital, the resulting ownership claims are recorded in the capital stock section of stockholders' equity. e. Declared Dividends: Dividends become an obligation to the company on the date of declaration. f. Paid Dividends: The obligation incurred at the date of declaration is retired when the dividends are paid. g. Declared stock dividend: Small stock dividends are capitalized using the stock's market value, while large stock dividends are capitalized at the stock's par value. Consider how the necessary journal entry affects capital stock. h. Declared Dividends: Dividends become an obligation to the company on the date of declaration. i. Paid Dividends: The obligation incurred at the date of declaration is retired when the dividends are paid. 2. Determine the total dollar amount of dividends (cash and stock) for the year. x 3. Conceptual Connection: Determine the effect on total assets and total stockholders' equity of the dividend transactions. Note the following: 1. If applicable, select the dividend transaction effect (e.g. "Affects assets", "Affects stockholders' equity", "No effect" or "Not a dividend transaction"). 2. Enter decreases in assets or equity as negative numbers. 3. If a cell does not require an answer, leave it blank. Feedback v check My Work 2. Consider how the journal entries for all transactions affected dividends declared. 3. Consider how the debits and credits to the accounts affected in the journal entries affect total assets and stockholders' equity
