Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31, 2015, appears below. Common stock, $10 par value, 200,000 shares authorized; 75,000 shares issued and outstanding Paid-in capital in excess of par value Retained earnings During 2016, the following transactions occurred: May 12 Declared and issued a 6% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Transaction 5/12 Declared and issued stock dividend 12/31 Declared andpaid cash dividend b. Prepare the journal entries for these transactions. General Journal Date 5/12 Retained earnings Description Common Stock Additional paid-in capital 12/31 Retained earnings Cash Cash Asset + 0 + (56,250) * + Debit 81,000 0 0 56,250 x 0 $750,000 480,000 305,000 c. Post the journal entries from b to the related T-accounts. Noncash Asset Credit 0 = 0 = 0 45,000 36,000 = 0 56,250 x Balance Sheet Liabilities + 0 + 0+ Contrib. Capital 81,000+ 0 + + Earned Capital (81,000) (56,250) * Revenues 0 0 Income Statel Expenses 0 0

Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31,2015 , appears below. During 2016, the following transactions occurred: May 12 Declared and issued a 6 th stock dividend, the common stock market value was 518 per share. Dec 31 Declared and paid a cash dividend of 75 cents per share. b. Prepare the journal entries for these transactions. c. Post the journal entries from b to the related Traccounts