(A) Journalize the transactions. (Record entries in the order displayed in the p

Question

(A) 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.)

(B) Enter the beginning balances in the accounts and post the journal entries to the stockholders’ equity accounts. (Post entries in the order of journal entries posted in the previous part.)

(C) Calculate the payout ratio, earnings per share, and return on common stockholders’ equity. (Round earning per share to 2 decimal places, e.g. $2.65 and all other answers to 1 decimal place. 17.5%.)

Explanation / Answer

1 cash debit 30000 credit common stock 20000 credit additional paid in capital 10000 2- common treasury stock debit 7000 credit cash 7000 3- retained earnings debit 35000 credit preference dividend 35000 4- preference dividend debit 35000 credit cash 35000 5- retained earnings debit 127500 credit cash dividend 127500 cash dividend debit 127500 credit cash 127500 stock holders equity account retained earning 688000 common stock account closing balance 280000 common stock account 1000000 total of retained earnings 968000 new shares issued 20000 preference dividend 35000 total common stock 1020000 equity dividend 127500 total dividend paid 162500 treasury stock 7000+40000 47000 retained earning left 805500 total common stock 973000 preference shares 300000 Net income 280000 additional paid in capital on preferred stock 15000 cash dividend 127500 additional paid in capital on commion stock 490000 490000 preference dividend 35000 retianed earnings 805500 total dividend paid 162500 total of share holders equity 2583500 income transferred to retained earnings 117500 closing balance in retained earning 805500 dividend pay out ratio dividend paid/net income 0.4196429 41.9642857 earning per share net income/no of share outstanding 1.0035842 common stock 250000 new common stock issues 5000 255000 treasury stock 6000 common stock issued 249000 preference share 30000 no of shares outstanding 279000 return on common stock holders free profits after preference dividend/total common stock equity 23.23376 PERCENT free profits for common stock holders 245000 total common stock equity 1054500

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