On january 1, Chreesh Corp had 95,000 shares of a no par common stock issued and

Question

On january 1, Chreesh Corp had 95,000 shares of a no par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occured.

Apr. 1 Issued 25,000 additional shares of common stock for 17 per share
June 15 Declared a cash dividend of $1 per hsare to stockholders of record on June 30
July 10 paid the $1 cash dividend
Dec 1 Issued 2,000 additional shared of comonn stock for $19 per share
Dec 15 Declared a cash dividend on outstanding shared of $1.20 per share to stockholders of record on dec 31

Explanation / Answer

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1) Longacre Corporation has 7,795 shares of common stock outstanding. It declares a $3 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend.


2) Noble Co. had these transactions during the current period.

June 12 Issued 86,490 shares of $1 par value common stock for cash of $324,338.
July 11 Issued 3,060 shares of $103 par value preferred stock for cash at $116per share.
Nov. 28 Purchased 2,060 shares of treasury stock for $12,130.

Prepare the journal entries for the transactions

3) On January 1 Trear Corporation had 75,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred.

Apr. 1 Issued 6,250 additional shares of common stock for $13.75 per share.
June 15 Declared a cash dividend of $1.74 per share to stockholders of record on June 30.
July 10 Paid the $1.74 cash dividend.
Dec. 1 Issued 4,640 additional shares of common stock for $16.25 per share.
Dec. 15 Declared a cash dividend on outstanding shares of $1.97 per share to stockholders of record on December 31.

Prepare the entries, if any, on each of the three dates that involved dividends. (Round all answers to 0 decimal places, e.g. 12,510.)

Date Account/Description Debit Credit
June 15

July 10

Dec. 15

How are dividends and dividends payable reported in the financial statements prepared at December 31?

In the , dividends of $ will be .

In the , Dividends payable of $ will be reported as a

ANSWER:

1) Longacre Corporation has 7,795 shares of common stock outstanding. It declares a $3 per share cash dividend on November 1 to stockholders of record on December 1.
Dr Dividend* $23,385
Cr Dividend payable $23,385
*dividend accounts are closed off to retained earnings account.

The dividend is paid on December 31.
Dr Dividend payable $23,385
Cr Cash $23,385

2) Noble Co. had these transactions during the current period.
June 12 Issued 86,490 shares of $1 par value common stock for cash of $324,338
Dr Cash $324,338
Cr Common stock $86,490
Cr Paid-in Capital in Excess of Par Value - Common stock $237,848

July 11 Issued 3,060 shares of $103 par value preferred stock for cash at $116 per share
Dr Cash $354,960
Cr Preferred stock $315,180
Cr Paid-in Capital in Excess of Par Value - Preferred stock $39,780

Nov. 28 Purchased 2,060 shares of treasury stock for $12,130
Dr Treasury stock $12,130
Cr Cash $12,130

3) On January 1 Trear Corporation had 75,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred.
Apr. 1 Issued 6,250 additional shares of common stock for $13.75 per share
Dr Cash $85,937.50
Cr Common stock $31,250
Cr Paid-in capital in excess of stated value $54,687.50
There are now 81,250 shares of no-par common stock issued and outstanding.

June 15 Declared a cash dividend of $1.74 per share to stockholders of record on June 30
Dr Dividends $141,375 (81,250 x $1.74)
Cr Dividend payable $141,375

July 10 Paid the $1.74 cash dividend
Dr Dividend payable $141,375
Cr Cash $141,375

Dec. 1 Issued 4,640 additional shares of common stock for $16.25 per share
Dr Cash $75,400
Cr Common stock $23,200
Cr Paid-in capital in excess of stated value $52,200
There are now 85,890 shares of no-par common stock issued and outstanding.

Dec. 15 Declared a cash dividend on outstanding shares of $1.97 per share to stockholders of record on December 31
Dr Dividends $169,203.30 (85,890 x $1.97)
Cr Dividend payable $169,203.30

How are dividends and dividends payable reported in the financial statements prepared at December 31?
In the statement of changes in equity, dividends of $310,578.30 will be distributed.

In the balance sheet, Dividends payable of $169,203.30 will be reported as a current liability.

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