Chapter 13 Homework Chapter 13 Homework × G Solved: The stockholders\' x × C Sec
ID: 2330564 • Letter: C
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Chapter 13 Homework Chapter 13 Homework × G Solved: The stockholders' x × C Secure https://newconnect.mheducation.com/flow/connect.html Check my work mode This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Required information [The following information applies to the questions displayed below The stockholders' equity of TVX Company at the beginning of the day on February 5 follows: Part 1 of 3 Conmon stock-$15 par value, 150,e00 shares authorized, 71, shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $1,065,0ee 525,88e 675,000 10 points $2,265,8ee On February 5, the directors declare a 14% stock dividend distributable on February 28 to the February 15 stockholders of ecord. The stock's market value is $46 per share on February 5 before the stock dividend. The stock's market value is $40 per share on February 28 1. Prepare entries to record both the dividend declaration and its distribution. Answer is not complete No Date General Journal Debit Credit Feb 05 Retained earnings 4752400 Common stock dividend distributable 475.240 Mc KPrev 2 3 4 of 6 Next> 2:47 PM 9/9/2018Explanation / Answer
Requirement-1, Journal Entries for Dividend Declaration and it’s distribution
Date
Particulars
Debit
Credit
Feb 5
Retained Earnings
(71,000 x 14% x $46)
$ 4,57,240
Common stock dividend distributable
(71,000 x 14% x $15)
$149,100
Paid in capital in excess of par value, common stock
(71,000 x 14% x $31)
$308,140
(Declared 14% stock dividend)
Feb 28
Common stock dividend distributable
$149,100
Common stock
$149,100
(Distributed common stock dividend declared on Feb 5)
Requirement – 2
Before
After
Book value per share
$31.90
$27.98
Total book value of shares
$31,900
$31,900
Book value per share Before
= $ 22,65,000 / 71,000
= $31.90
Book value per share After
= $ 22,65,000 / (71,000 x 114%)
= $27.98
Total book value of shares Before
= 1000 Shares x $31.90
= $31,900
Total book value of shares After
= (1000 Shares x 114%) x $27.98
= $31,900
Requirement -3
February 5
February 28
Total Market Value of Shares
$46,000
$45,600
February 5
Market value = $46
Total market value = $46 x 1000 = $46,000
February 28
Market value = $40
Total market value = $40 x (1,000 x 114%) = $45,600
Date
Particulars
Debit
Credit
Feb 5
Retained Earnings
(71,000 x 14% x $46)
$ 4,57,240
Common stock dividend distributable
(71,000 x 14% x $15)
$149,100
Paid in capital in excess of par value, common stock
(71,000 x 14% x $31)
$308,140
(Declared 14% stock dividend)
Feb 28
Common stock dividend distributable
$149,100
Common stock
$149,100
(Distributed common stock dividend declared on Feb 5)
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