stockholder equity quiz. 1 question 3 ledger postings. very easy should take 10 minutes

ACC 203 (Financial Accounting), Accounting, Lubin, Pace University, Dr. K. Chung Quiz #8. Accounting for stockholders' equity Student's Name: ________________________ D-Share, Inc. has two classes of stock authorized: 10%, $100 par preferred and $1 par value common. As of the beginning of 2015, 5,000 shares of preferred stock and 2,000,000 shares of common stock have been issued. The following beginning balances in its stockholders' equity accounts on January 1, 2015 are: preferred stock, $500,000; common stock, $2,000,000; additional paid-in capital, $6,100,000; and retained earnings, $2,500,000. 1. Record the following transactions affect stockholders' equity during 2015: March 1 Issue 100,000 shares of common stock for $5 per share. May 15 Repurchase 10,000 shares of treasury stock for $6 per share. July 10 Reissue 5,000 shares of treasury stock purchased on May 15 for $7 per share. October 15 Issue 1,000 shares of preferred stock for $130 per share. December 1 December 15 Declare a cash dividend on preferred stock at given rate and declare a cash dividend on common stock at $0.25 per share to all stockholders of record on December 15. Hint: Dividends are not paid on treasury stock. Pay the cash dividends declared on December 1. 2. Suppose the company declared 10% stock dividend on common stock on December 1 when its stock price was $8, record the journal entry (to find out how much of retained earnings will decrease, and how much of common stock and additional paid-in capital will increase). 3. Suppose the company declared 100% stock dividend on common stock on December 1 when its stock price was $8, record the journal entry (to find out how much of retained earnings will decrease, and how much of common stock and additional paid-in capital will increase.) Answer 1. Date 3/1 5/15 7/10 10/1 5 Accounts Dr. Cr. 12/1 12/1 5 Answer 2. 12/1 Answer 3. 12/1