Question 3 Partially correct Mark 26.91 out of 40.00 P Flag question Edit question Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31, 2015, appears below. Common stack. $12 par value, 200,000 shares authorized 80,000 shares issued and outstanding 5960,000 Paid-in capital in excess of par value 485,000 Relained earnings 310000 During 2016, the following transactions occurred: May 12 Declared and issued a 5% stack dividend, the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Income Statement a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Noncash Contrib. Earned Transaction Cash Asset Asset Liabilities Capital Capital 5/12 Declared and issued stock dividend B6,400 + (86,400) 12/31 Declared and paid cash dividend (28,800) 0+ (28,800) X + + Revenues - Net Income Expenses O . + + oo > > OO >> 0 0+ 0 0 Credit b. Prepare the journal entries for these transactions. General Journal Date Description Debit 5/12 Retained earnings 86,400 Common Stock Additional paid in capital 12/31 Retained earnings 153,600 x Cash 0 0 57,600 28,800 @ O 153,600 X c. Post the journal entries from b to the related T-accounts. 5/12 Cash (A) 153,600 X 153,600 x OX 5/12 12/31 Common Stock (SE) 28,800 x 86,400 x 57,600 x 0 5/12 12/31 Retained Earnings (SE) 86,400 0 153,600 x 240,000 x 5/12 12/31 Additional Paid in Capital (SE) 57,500 X 86,400 x 28,800 x 0 12/31 d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283.000. Do not use negative signs with answers below. PALEPU COMPANY Statement of Retained Earnings For the Year Ended December 31, 2016 Retained earnings, December 31, 2015 310,000 Add: Net income 283,000 593,000 Less: Cash dividends declared $ 153,600 x Stock dividends declared 86,400 OX Retained earrings, December 31, 2016 $ 353,000 x Question 3 Partially correct Mark 26.91 out of 40.00 P Flag question Edit question Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31, 2015, appears below. Common stack. $12 par value, 200,000 shares authorized 80,000 shares issued and outstanding 5960,000 Paid-in capital in excess of par value 485,000 Relained earnings 310000 During 2016, the following transactions occurred: May 12 Declared and issued a 5% stack dividend, the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. Income Statement a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Noncash Contrib. Earned Transaction Cash Asset Asset Liabilities Capital Capital 5/12 Declared and issued stock dividend B6,400 + (86,400) 12/31 Declared and paid cash dividend (28,800) 0+ (28,800) X + + Revenues - Net Income Expenses O . + + oo > > OO >> 0 0+ 0 0 Credit b. Prepare the journal entries for these transactions. General Journal Date Description Debit 5/12 Retained earnings 86,400 Common Stock Additional paid in capital 12/31 Retained earnings 153,600 x Cash 0 0 57,600 28,800 @ O 153,600 X c. Post the journal entries from b to the related T-accounts. 5/12 Cash (A) 153,600 X 153,600 x OX 5/12 12/31 Common Stock (SE) 28,800 x 86,400 x 57,600 x 0 5/12 12/31 Retained Earnings (SE) 86,400 0 153,600 x 240,000 x 5/12 12/31 Additional Paid in Capital (SE) 57,500 X 86,400 x 28,800 x 0 12/31 d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283.000. Do not use negative signs with answers below. PALEPU COMPANY Statement of Retained Earnings For the Year Ended December 31, 2016 Retained earnings, December 31, 2015 310,000 Add: Net income 283,000 593,000 Less: Cash dividends declared $ 153,600 x Stock dividends declared 86,400 OX Retained earrings, December 31, 2016 $ 353,000 x
