Problem 11-7A (Part Level Submission) On January 1, 2019, Larkspur, Inc. had the following stockholders' equity accounts.

Common Stock ($10 par value, 78,300 shares issued and outstanding) $783,000

Paid-in Capital in Excess of Par Value-Common Stock 199,000

Retained Earnings 593,000

During the year, the following transactions occurred.

Jan. 15 Declared a $1.10 cash dividend per share to stockholders of record on January 31, payable

February 15. Feb. 15 Paid the dividend declared in January.

Apr. 15 Declared a 5% stock dividend to stockholders of record on April 30, distributable

May 15. On April 15, the market price of the stock was $16 per share. May 15 Issued the shares for the stock dividend.

July 1 Announced a 2-for-1 stock split. The market price per share prior to the announcement was $14. (The new par value is $5.)

Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2020.

Dec. 31 Determined that net income for the year was $225,000.

a)Journalize the transactions and the closing entries for net income and dividends.

FYI

Solution

CLOSE

Problem 11-7A (Part Level Submission)

Jan. 15	Cash Dividends	(78,300 $1.10)	$86,130
Apr. 15	Stock Dividends	(3,915 $16)	$62,640
	Common Stock Dividends Distributable	(3,915 $10)	$39,150
	Paid-in Capital in Excess of Par-Common Stock	(3,915 $6)	$23,490
July 1	Memo - two-for-one stock split increases number of shares to 164,430
	= (82,215 2) and reduces par value to $5 per share.
Dec. 1	Cash Dividends	(164,430 $0.50)	$82,215
Dec. 31	Retained Earnings	($39,150 + $82,215)	$168,345