1) Journalize The Transactions; Dr. and Cr. Amounts on Dec 1 and Dec 31. 2) Ente

Question

1) Journalize The Transactions; Dr. and Cr. Amounts on Dec 1 and Dec 31. 2) Enter The Beginning Balance; Retained Earnings and Dividends Payable. 3) The Balance Sheet; Retained Earnings, Total Paid-in Capital and Retained Earnings, and Total Stockholders’ Equity. 4) Calculate the Payout Ratio and the Earnings Per Share.
Problem 11-2A The stockholders' equity accounts of Martinez Corp. on January 1, 2017, were as follows. Preferred Stock (796, $100 par noncumulative, 5,000 shares authorized) Common Stock ($4 stated value, 300,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock (5,000 common shares) $300,000 1,000,000 15,000 480,000 689,000 40,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders' equity. Feb. 1 Issued 5,000 shares of common stock for $30,000. Mar. 20 Purchased 1,000 additional shares of common treasury stock at $8 per share. Oct. 1 Declared a 7% cash dividend on preferred stock, payable November 1. Nov. 1 Paid the dividend declared on October 1 Dec. 1 Declared a $0.50 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. Dec. 31 Determined that net income for the year was $275,700. Paid the dividend declared on December 1.

Explanation / Answer

Date Accounts Title Dr Cr 1-Dec Cash Dividend 127000 Dividend Payable 127000 (250000+5000-1000)*.5 31-Dec Retained Earnings 148000 Cash Dividend (127000+21000) 148000 31 De Dividend Payable 148000 Cash 148000 Retained Eranings 31-Dec 148000 Beg Bal 689000 31-Dec 275700 End Bal 816700 Partial Balance Sheet Toatl Paid in capital 1825000 Add: retained Earnings 816700 (689000+275700-148000) Toatl Paid in capital & Retained Eranings 2641700 Less: treasury stock 48000 Total stockholder Equity 2593700 payout ratio 0.5 Dividend/Net Income 127000/275700 EPS 1.03 Net income-preferred Dividend/Weighted avg common stock (275700-21000)/248458 Weighted avg stock 1-1 to 2-1 245000*2/12 40833 2-1 to 3/20 250000*1.5/12 31250 3/20 to 12/31 249000*8.5/12 176375 Total 248458

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