PROBLEM 111 (20%) The following transactions took place in 2018 for Dahmer Corp

Question

PROBLEM 111 (20%) The following transactions took place in 2018 for Dahmer Corp Jan, 2 Issued 20,000 shares of $1 par value common stock for $50,000.. Declared dividend of $4 per share on the outstanding shares of common stock to shareholders of record as of March 25. Assume that there wer 50,000 shares of outstanding stock as of March 15. Paid dividends declared March 15. Reacquired 10,000 shares of its own stock at $13. Declared and issued a 10% stock dividend on the outstanding common stock. The fair market value of a common share of Dahmer Corp. was $16. Mar. 15 Apr.1 July1 Sept. 1 REQUIRED: Prepare the journal entries for the above dates.

Explanation / Answer

Journal Entries: Date Particulars Debit Credit Jan-02 Cash a/c                                                   Dr 50000      To Common Stock a/c 20000      To Securities Premium a/c 30000 [Being Issue of Common Stock at premium] Mar-15 Retained Earnings a/c                        Dr 200000      To Dividend Payable a/c 200000 [Being dividend declared] Apr-01 Dividend Payable a/c                          Dr 200000      To Cash a/c 200000 [Being declared dividends paid] Jul-01 Common Stock a/c                                Dr 10000 Securities Premium a/c                       Dr 120000      To Cash a/c 130000 [Being Common Stock Reacquired] Sep-01 Dividend a/c (40000*10%*16)             Dr 64000      To Common Stock a/c 4000      To Securities Premium a/c 60000 [Being Stock Dividend issued]

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