Selected transactions completed by Primo Discount Corporation during the current
ID: 2423897 • Letter: S
Question
Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows:
The stock outstanding when a corporation has issued only one class of stock.
A dollar amount assigned to each share of stock.
Shares of ownership of a corporation.
Distribution of a corporation’s earnings to stockholders.
A class of stock with preferential rights over common stock.
The owners of a corporation.
A cash distribution of earnings by a corporation to its shareholders.
Stock that a corporation has once issued and then reacquires.
A distribution of shares of stock to its stockholders.
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
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Jan. 9 Split the common stockThe stock outstanding when a corporation has issued only one class of stock.
3 for 1 and reduced the parA dollar amount assigned to each share of stock.
from $75 to $25 per share. After the split, there were 1,201,500 common shares outstanding. Feb. 28 Purchased 40,200 shares of the corporation’s own common stock at $27, recording the stockShares of ownership of a corporation.
at cost. May 1 Declared semiannual dividendsDistribution of a corporation’s earnings to stockholders.
of $0.70 on 70,500 shares of preferred stockA class of stock with preferential rights over common stock.
and $0.14 on the common stock to stockholdersThe owners of a corporation.
of record on June 1, payable on July 10. Jul. 10 Paid the cash dividendsA cash distribution of earnings by a corporation to its shareholders.
. Sep. 7 Sold 31,600 shares of treasury stockStock that a corporation has once issued and then reacquires.
at $33, receiving cash. Oct. 1 Declared semiannual dividends of $0.70 on the preferred stock and $0.14 on the common stock (before the stock dividend). In addition, a 2% common stock dividendA distribution of shares of stock to its stockholders.
was declared on the common stock outstanding. The fair market value of the common stock is estimated at $38. Dec. 1 Paid the cash dividends and issued the certificates for the common stock dividend.Explanation / Answer
Journal 9-Jan Common stock ($ 75 par) 30037500 To Common stock($ 25 par) 30037500 28-Feb Treasury Stock 1085400 To cash 1085400 1-May Dividend 211932 To Dividend payable 211932 (0.7*70500)+(0.14*1161300) 10-Jul Dividend payable 211932 To cash 211932 7-Sep Cash 1275000 To Treasury Stock 1085400 To additional paid in capital 189600 1-Oct Dividend 216356 To Dividend payable 216356 (0.7*70500)+(0.14*(1161300+31600)) 1-Oct Retained earnings 596450 To common stock dividend distributable 596450 2%*(1161300+31600)*25 1-Dec Dividend payable 216356 To cash 216356 1-Dec common stock dividend distributable 596450 To common stock 596450
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