edugen.wileyplus.com Print by: Ram Len ACCT_210 HYB A Fall 2017: Introduction to

Question

edugen.wileyplus.com Print by: Ram Len ACCT_210 HYB A Fall 2017: Introduction to Financial Accounting / Module 12 Brief Exercises, Question Exercises *Problem 11-7A On January 1, 2019, Novak Corp. had the following stockholders' equity accounts. Common Stock ($14 par value, 78,300 shares issued and outstanding) $1,096,200 211,000 518,000 Paid-in Capital in Excess of Par Value-Common Stock Retained Earnings During the year, the following transactions occurred. Jan. 15 Declared a $1.12 cash dividend per share to stockholders of record on January 31, payable Februay 15 Feb. 15 Paid the dividend declared in January Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 1 S. On April 15, the market price of the stock was $16 per share. Issued the shares for the stock dividend. Announced a 2-for-1 stock split. The market price per share prior to the value is $7.) May 15 announcement was S14(The new par July 1 Dec. 1 Declared a $0.90 per share cash dividend to stockhoiders of record on December 15 payable lenuary 10, 2020 Dec. 31 Determined that net income for the year was $285,000 presented in the problem. Credit account titles are automaticalix indented when the amount is entered. Do not indent manually. rr no entry is required, selecETWO ERCO ron he #6cou Date Dournalize the transactions and the closing entries for net income and dividends. (Record journal entries in the order d enter o for the amounts. Debit Credit Account Titles and Explanation

Explanation / Answer

Date Account Titles Debit Credit Jan.15 Cash Dividends (78,300 X $1.12) $87,696                                  Dividends Payable $87,696 Feb. 15 Dividend Payable $87,696                        Cash $87,696 Apr.15 Share Dividends (78,300 X 10% X $16) $125,280                     Ordinary Share Dividends Distributable (78,300 X 10% X $14 $109,620                      Share Premium—Ordinary (78,300 x 10% x $2) $15,660 May.15                     Ordinary Share Dividends Distributable (78,300 X 10% X $14) $109,620                           Share Capital—Ordinary $109,620 Jul.1 Memo—two-for-one share split increases the number of shares outstanding to 172,260, or (86,130 X 2) and reduces the par value to $7 per share. Dec.31 Cash Dividends (172260 X $.90) $155,034                                  Dividends Payable $155,034 Dec.31 Income Summary $285,000                   Retained Earnings $285,000 Dec.31 Retained Earnings $242,730                   Cash Dividends $242,730 Dec.31 Retained Earnings $125,280                   Share Dividends $125,280

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