On January 1, Cheyenne Corp. had 61,400 shares of no-par common stock issued and

Question

On January 1, Cheyenne Corp. had 61,400 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.

Apr. 1 Issued 11,250 additional shares of common stock for $11 per share. June 15 Declared a cash dividend of $1.90 per share to stockholders of record on June 30. July 10 Paid the $1.90 cash dividend. Dec. 1 Issued 5,000 additional shares of common stock for $12 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.00 per share to stockholders of record on December 31.

Explanation / Answer

Date Particulars Debit ($) Credit ($) 15-Jun Retained Earnings A/c Dr. 138035          To Dividend Payable A/c   Cr. 138035 (Being dividend declared at $1.90 per share outstanding as on the record date of June 30) 10-Jul Dividend Payable A/c Dr. 138035           To Bank A/c            Cr. 138035 (Being dividend declared on 15-Jun paid.) 15-Dec Retained Earnings A/c Dr. 155300          To Dividend Payable A/c   Cr. 155300 (Being dividend declared at $2.00 per share outstanding as on the record date of December 31) Notes: (1) No. of outstanding shares as on Jan. 1 61400 Add: Apr. 1 Shares issued 11250 No. of outstanding shares as on June 30 (Record date for June dividend) 72650 Add: Dec. 1 Shares issued 5000 No. of outstanding shares as on Dec 31 (Record date for Dec. dividend) 77650 (2) Amount of dividend - Dividend declared June 15 (72650*$1.90) 138035 Amount of dividend - Dividend declared June 15 (77650*$2.00) 155300

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