eBook Calculator Cash Dividends, Stock Dividend, and Stock Split During the year

Question

eBook Calculator Cash Dividends, Stock Dividend, and Stock Split During the year ended December 31, 20-, Choi Company completed the following transactions: Apr. 15 Declared a semiannual dividend of $1.3 per share on preferred stock and $0.4 per share on common stock to shareholders of record on May 5, payable May 10 Paid the cash dividends. Oct. 15 on May 10. Currently, 5,300 shares of $50 par preferred stock and 84,800 shares of $1 par common stock are outstanding. Declared semiannual dividend of $1.3 per share on preferred stock and $0.4 per share on common stock to shareholders of record on November 5, payable on November 20. Nov. 20 Paid the cash dividends. 22 Declared a 10% stock dividend to common shareholders of record on December 8, distributable on December 16, iarketale orthe common sto* estimated at $9 per share. Dec. 16 Issued certificates for common stock dividend. 20 Board of directors declared a two-for-one common stock split. Required: Prepare journal entries for the transactions. If an amount box does not require an entry, leave it blank Page: 1 DOC. POST. DEBIT CREDIT DATE ACCOUNT TITLE 1 Apr. 15

Explanation / Answer

Notes:1 Dividend Calculation Common Stock Preferred Stock Outstanding Shares                       84,800                           5,300 April 15 Dividend Declared= $                       0.40 $                         1.30 total $                  33,920 $                       6,890 total of Both $                  40,810 Notes 2: Number of Stock After Stock Split Common Stock Outstanding Shares                       84,800 Split for Two-For -One = 84,800 Shares X 2 Per shares =                   1,69,600 New Par value = $ 1 / 2 = $                       0.50 Journal Entries Date Account Title and explanation Debit Credit April, 15 Retained Earning or Dividend Account $                  40,810       To Dividend Payable $                     40,810 (Record the dividend Payable for semi-annual) May, 10 Dividend Payable $                  40,810        To Cash $                     40,810 (To Record the payment of Dividend ) OCt, 15 Retained Earning or Dividend Account $                  40,810       To Dividend Payable $                     40,810 (Record the dividend Payable for semi-annual) Nov, 20 Dividend Payable $                  40,810        To Cash $                     40,810 (To Record the payment of Dividend ) Dec, 16 "No Entry "for Issued Certificate No Journal entry is required for this , Only memo Note is done for this transaction Dec, 20 Number of shares will be doubled =                   1,69,600 Shares Par value will be reduced from $ 1 to $ 0.50 $                         0.5 Per shares

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