On January 1, 2012, Cornell Corporation had these stockholders’ equity accounts.

Question

On January 1, 2012, Cornell Corporation had these stockholders’ equity accounts.

During the year, the following transactions occurred.

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $13 per share.

Dec. 1 Declared a $0.50 per share cash divdend to stockholders of record on December 15, payable January 10, 2013

Journalize the transactions. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Common Stock ($10 par value, 82,700 shares issued and outstanding) $827,000 Paid-in Capital in Excess of Par Value 509,400 Retained Earnings 668,200

Explanation / Answer

Answer:-

Cash dividend = 82700*.60= $49,620

82,700*10% = 8,270 shares distributed

8,270 * 13 = $107,510

There are now 82,700 + 8,270 = 90,970 shares outstanding

Dec. 1 Declared a $0.50 per share cash divdend to stockholders of record on December 15, payable January 10, 2013

90,970 x 0.60 = 54,582 dividend amount

Jan. 15 Declared a $0.60 cash dividend per share to stockholders of record on January 31, payable February 15.

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