Crowns Company uses the chart of accounts shown below. Use the numbers preceding

Question

Crowns Company uses the chart of accounts shown below. Use the numbers preceding each account title to create journal entries for each situation. Account titles may be used more than once, or not at all, and journal entries may have two, three, or more lines. Item 0 is provided as an example.

Account Titles

1. Cash

2. Accounts Receivable

3. Sales

4. Dividends Payable

5. Preferred Stock

6. Common Stock

7. Common Stock Dividend Distributable

8. Paid-in Capital in Excess of Par--Preferred

9. Paid-in Capital in Excess of Par--Common

10. Treasury Stock

11. Cash Dividends

12. Stock Dividends

Situation Debit Credit Amount

0. Crowns sold merchandise for $1,500, receiving

$300 in cash with the balance on account.

1   

2

3   

$300   

$1,200

$1,500

1. Crowns issued 40,000 shares of $5 par value

common stock for $14 per share.

2. Crowns declared a $3 cash dividend per

share to common stockholders.

3. Crowns declared a 15% common stock dividend

when the market price of the stock was $15 per share.

4. Crowns purchased 2,000 shares of common stock

for the treasury at $16 per share.

0. Crowns sold merchandise for $1,500, receiving

$300 in cash with the balance on account.

1   

2

3   

$300   

$1,200

$1,500

1. Crowns issued 40,000 shares of $5 par value

common stock for $14 per share.

2. Crowns declared a $3 cash dividend per

share to common stockholders.

3. Crowns declared a 15% common stock dividend

when the market price of the stock was $15 per share.

4. Crowns purchased 2,000 shares of common stock

for the treasury at $16 per share.

Explanation / Answer

0. Crowns sold merchandise for $1,500, receiving

$300 in cash with the balance on account.

1   

2

3   

$300   

$1,200

$1,500

1. Crowns issued 40,000 shares of $5 par value

common stock for $14 per share.

6

9

$560000

$200000

$360000

2. Crowns declared a $3 cash dividend per

share to common stockholders.

1

$120000

$120000

3. Crowns declared a 15% common stock dividend

when the market price of the stock was $15 per share.

4

$30000

$30000

4. Crowns purchased 2,000 shares of common stock

for the treasury at $16 per share.

1

$32000

$32000

For entry number 3. dividend amount is caclculated as below:

15% * $5 * 40000 = $30000

0. Crowns sold merchandise for $1,500, receiving

$300 in cash with the balance on account.

1   

2

3   

$300   

$1,200

$1,500

1. Crowns issued 40,000 shares of $5 par value

common stock for $14 per share.

1

6

9

$560000

$200000

$360000

2. Crowns declared a $3 cash dividend per

share to common stockholders.

11

1

$120000

$120000

3. Crowns declared a 15% common stock dividend

when the market price of the stock was $15 per share.

7

4

$30000

$30000

4. Crowns purchased 2,000 shares of common stock

for the treasury at $16 per share.

10

1

$32000

$32000

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