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Retained Earnings: Transactions and Statement The stockholders equity of Elsworth Corporation at January 1 is shown below: 5 Percent preferred stock, $100 par value, 10,000
Retained Earnings: Transactions and Statement
The stockholders equity of Elsworth Corporation at January 1 is shown below:
5 Percent preferred stock, $100 par value, 10,000 shares authorized; | |
4,000 shares issued and outstanding | $400,000 |
Common stock, $5 par value, 200,000 shares | |
authorized; 50,000 shares issued and outstanding | $250,000 |
Paid-in capital in excess of par valuePreferred stock | 40,000 |
Paid-in capital in excess of par valueCommon stock | 300,000 |
Retained earnings | 656,000 |
Total Stockholders Equity | $1,646,000 |
The following transactions, among others, occurred during the year:
Apr. | 1 | Declared a 100 percent stock dividend on all outstanding shares of common stock. The market value of the stock was $16 per share. |
15 | Issued the stock dividend declared on April 1. | |
Dec. | 7 | Declared a two percent stock dividend on all outstanding shares of common stock. The market value of the stock was $18 per share. |
17 | Issued the stock dividend declared on December 7. | |
20 | Declared the annual cash dividend on the preferred stock and a cash dividend of $1.20 per common share, payable on January 15 to common stockholders of record on December 31. |
Required
a. Prepare journal entries to record the foregoing transactions.
General Journal | |||
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Date | Description | Debit | Credit |
Apr.01 | AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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Declared stock dividend on common stock. | |||
Apr.15 | AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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Issued common shares as common stock declared as a dividend. | |||
Dec.07 | AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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Paid-in-Capital in Excess of Par Value - Common Stock. | Answer
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Declared a cash dividend on common stock outstanding. | |||
Dec.17 | AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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Issued Shares of common stock declared as a dividend. | |||
Dec.20 | AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock
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Dividends Payable - Common Stock | Answer
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Declared cash dividend on preferred and common stock. |
b. Prepare a statement of retained earnings. Net income for the year is $300,000.
Do not use negative signs with your answers.
ELSWORTH CORPORATION Statement of Retained Earnings For the Year Ended December 31 | |||
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Retained Earnings, January 1 | Answer
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AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared
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Answer
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AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared
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Stock Dividends Declared | Answer
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AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared
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