Problem 6 - 30 Points

On January 1, 2014, Chen Corporation had the following stockholder's equity accounts.

Common Stock ($5 par value, 200,000 shares issued and outstanding)

Paid-in Capital in Excess of Par - Common Stock

Retained Earnings

$1,000,000

200,000

840,000

During the year, the following transactions occurred.

Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, payable

February 15.

Feb. 15

Paid the dividend declared in January.

April 15

Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On

April 15, the market price of the stock was $15 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

$17. (The new par value is $2.50.)

Dec. 1

Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable

January 10, 2015.

31

Determined that net income for the year was $250,000.

Instructions

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

Problem 6 -30 Points On January 1, 2014, Chen Corporation had the following stockholder's equity accounts. Common Stock ($5 par value, 200,000 shares issued and outstanding) $1,000,000 Paid-in Capital in Excess of Par-Common Stock 200,000 Retained Earnings 840,000 During the year, the following transactions occurred. Jan. 15 Declared a $1 cash dividend per share to stockholders of record on January 31, payable February 15. Feb. 15 Paid the dividend declared in January. April 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 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 $17. (The new par value is $2.50.) Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2015. 31 Determined that net income for the year was $250,000. Instructions Journalize the transactions and the closing entries for net income and dividends