Lemke Corporation produces and sells piano. The Stockholders\' Equity accounts o

Question

Lemke Corporation produces and sells piano. The Stockholders' Equity accounts on January 1, 2017 are as follows Common Stock, $10 par (100,000 shares authorized, 40,000 shares issued) PIC in Excess par-Common Stock Retained Earnings Treasury Stock (10,000 shares at cost) $400,000 200,000 900,000 200,000 The following transactions occurred during the year Declared a Cash Dividend of $0.80 per share on the Common Stock outstanding. Dividend will be paid on 2/16. Pald the Cash Dividend that was previously deciared on 1/16. Reissued 5,000 shares of the Treasury Stock at $25 per share. Issued 15,000 shares of Common Stock for $30 per share. The directors declare a 2% stock dividend distributable on 9/13. The market value is $40 per share on this date 1/16 2/16 3/19 4/13 8/03 9/13 Distributed the Stock Dividend declared on 8/03. 11/17 Reissued the remaining 5,000 shares of Treasury Stock for $18 per share. 12/30 Declared a Cash Dividend of $0.90 per share on the Common Stock outstanding. The dividend will be paid on 1/30. 12/31 Closed the $80,000 credit balance of the Income Summary account. 12/31 Closed the dividends accounts

Explanation / Answer

ans 1 date Accounts Title Dr Cr 16-Jan Cash Dividend (30000*.8) 24000 Cash Dividend Payable 24000 16-Feb Cash Dividend Payable 24000 Cash 24000 19-Mar Cash (25*5000) 125000 PIC -Treasury stock 25000 Treasury stock (5000*20) 100000 13-Apr Cash (15000*30) 450000 Common stock 150000 PIC in excess par-Common stock 300000 3-Aug Stock dividend (1000*$40) 40000 Stock dvidend payable 40000 No of stock (40000-10000+5000+15000)*2% 1000 13-Sep Stock dvidend payable 40000 Common stock (1000*30) 10000 PIC in excess par-Common stock 30000 17-Nov Cash (18*5000) 90000 PIC -Treasury stock 10000 Treasury stock (5000*20) 100000 30-Dec Cash Dividend (40000+15000+1000)*.9 50400 Cash Dividend Payable 50400 31-Dec Income summary 80000 Retained Eranings 80000 31-Dec Retained Eranings 114400 Cash Dividend (24000+50400) 74400 Stock Dividend 40000 ans 2 Statement of Retained Earnings Retained Earnings, Jan 1 2017 900000 Add: net Income 80000 980000 Less; Cash Dividend 74400 Stock Dividend 40000 114400 Retained Earnings, Dec 31 2017 865600

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