Selected transactions completed by Primo Discount Corporation during the current
ID: 2426916 • Letter: S
Question
Selected transactions completed by Primo Discount Corporation during the current fiscal year are as follows:
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.
Income Summary
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 stock 3 for 1 and reduced the par from $75 to $25 per share. After the split, there were 1,092,000 common shares outstanding. Feb. 28 Purchased 39,500 shares of the corporation’s own common stock at $29, recording the stock at cost. May 1 Declared semiannual dividends of $0.60 on 74,300 shares of preferred stock and $0.14 on the common stock to stockholders of record on June 1, payable on July 10. Jul. 10 Paid the cash dividends. Sep. 7 Sold 28,500 shares of treasury stock at $33, receiving cash. Oct. 1 Declared semiannual dividends of $0.60 on the preferred stock and $0.14 on the common stock (before the stock dividend). In addition, a 5% common stock dividend 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
9-Jan Common Stock 27,300,000 To Common Stock 27,300,000 (Being split of shares 3 for 1) 28-Feb Treasury Stock 987,500 Paid in excess of par-Common Stock 158,000 To Bank 1,145,500 (Being purchase of own stock recorded at cost) 1-May Cash Dividend 44,580 Cash Dividend 147,350 To Cash Dividends payable 191,930 (Being dividend declared)* * Since the information on ledgers is not available we are not jounalising the entry for dividend on Treasury stocks 10-Jul Cash Dividend payable 191,930 To Bank 191,930 (Being Dividend paid) 7-Sep Bank 940,500 To Treasury Stock 712,500 Paid in capital from sale of treasury stock 228,000 (Being sale of treasury stock) 1-Oct Cash Dividend 44,580 Cash Dividend 151,340 To Cash Dividends payable 195,920 (Being dividend declared)* 1-Oct Stock dividend 1,351,250 To Stock dividend distributable 1,351,250 (Being stock dividend declared)* 1-Dec Retained earning 1,351,250 To Common Stock 1,351,250 1-Dec Cash Dividend payable 195,920 To Bank 195,920 (Being Dividend paid)
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