PROBLEM 5(12 points): On January 1,2017, Getsi Corporaton had he folowing stockh

Question

PROBLEM 5(12 points): On January 1,2017, Getsi Corporaton had he folowing stockholders' equity accounts. Common Stock ($10 par value, 100,000 shares issued and outstanding) Paid-in Capital in Excess of Par-Common Stock Retained Eamings 1,000,000 200,000 450,000 During the year, the following transactions occurred Jan. 15 Feb. 15 Mar. 1 Apr. 15 Dedlared Paid the dividend declared in January Issued 10,000 shares of common stock at $12 per share. Declared a 10% stock dividend to stod holders fre ord on Ap 130 distributable May 15. On April 15,the market price of the stock was $13 per share. a $1 cash dividend per share to stockholders of record on January 31, payable February 15 May 15 Issued the shares for the stock dividend. June 20 Purchased 2,000 shares of its $10 par common stock at $15 per share July 1 Announced a 2-for-1 stock split. The market price per share prior to the announcement was $17. Dec. 1 Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable Jan.5,2018. Dec. 31 Determined that net income for the year was $200,000 Instructions Jounalize the transactions and dlosing entries for net income and dividends. Note: Write clearly and use complete account names [do not abbreviate] General Journal J1 Date Account Titles and Explanation Ref. Debit Credit

Explanation / Answer

Date Account Titles And Explanation Debit Credit Jan.15 Cash Dividends (100,000 shares x $1) $100,000.00                Dividends Payable $100,000.00 Feb.15 Dividends Payable $100,000.00 Cash $100,000.00 Mar.1 Cash (10000 shares x $12) $120,000.00 Common Stock (10000 shares x $10) $100,000.00 Additional Paid in capital Excess of Par- Common $20,000.00 Apr.15 Stock Dividend (110,000 x 10% x $13) $143,000.00 Common Stock Dividends Distributable (10,000 X $10) $100,000.00 Paid-in Capital in Excess of Par Value (10,000 X $3) $43,000.00 May.15 Common Stock Dividends Distributable $100,000.00 Common Stock $100,000.00 Jun.20 Treasury stock $30,000.00 Cash $30,000.00 July 1 No Entry Two-for-one stock split increases number of shares to 220,000 = (110,000 X 2) Dec 1 Cash Dividends (220,000 shares x $.50) $110,000.00 Dividends Payable $110,000.00 Dec. 31 Income Summary $200,000.00 Retained Earnings $200,000.00 Dec. 31 Retained Earnings $143,000.00 Stock Dividend $143,000.00 Dec. 31 Retained Earnings $210,000.00 Cash Dividend $210,000.00

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