Problem 2: Equity DYE Co.\'s Shareholders\' Equity section appears below: Shareh
ID: 2592749 • Letter: P
Question
Problem 2: Equity
DYE Co.'s Shareholders' Equity section appears below:
Shareholders' Equity at November 30, 2010
Preferred shares $154,000
(14,000 shares outstanding, $ 0.65 dividend, cumulative, non-voting)
Common shares, no par value, 62,000 outstanding 775,000
Retained earnings 150,000
Total Shareholders' Equity 1,079,000
Transactions
Date
Dec. 4
Board of Directors of DYE declared a 10% Stock Dividend
Market value of DYE Co.’s stock $ 5.00 per share
Dec. 22
Board of Directors of DYE declared a 2-for-1 Stock Split
Market value of DYE Co.’s stock $ 5.50 per share
Dec. 22
Board of Directors of DYE declared a Cash Dividend of $40,000
Payable to Shareholder’s of Record on Jan. 15, 2011
Other Information
Net income for 2010 was $190,000.
The company’s fiscal year end is December 31, 2010.
No other dividends for were declared during 2010 except for those identified above.
Required:
Prepare the Journal Entries (transactions, adjusting and closing) on the dates indicated related to the Dividend information above. If no journal entries are required, write “No Entry Required”.
Date
Account
Debit
Credit
Dec. 4
Stock Dividend
Date
Account
Debit
Credit
Dec. 22
Stock Split
Date
Account
Debit
Credit
Dec. 22 Cash Dividend
b) What amount would appear in the Shareholders' Equity section for DYE Corporation at December 31, 2010, for the following items?:
1. Common Shares $___________________
2. Number of common shares outstanding ___________________
3. Retained Earnings $___________________
4. Total Shareholders' Equity $___________________
Transactions
Date
Dec. 4
Board of Directors of DYE declared a 10% Stock Dividend
Market value of DYE Co.’s stock $ 5.00 per share
Dec. 22
Board of Directors of DYE declared a 2-for-1 Stock Split
Market value of DYE Co.’s stock $ 5.50 per share
Dec. 22
Board of Directors of DYE declared a Cash Dividend of $40,000
Payable to Shareholder’s of Record on Jan. 15, 2011
Problem 2: Equity DYE Co.'s Shareholders' Equity section appears below: Shareholders' Equity at November 30, 2010 Preferred shares (14,000 shares outstanding, S 0.65 dividend, cumulative, non-voting) Common shares, no par value, 62,000 outstanding Retained earnings Total Shareholders' Equity $154,000 ransactions Board of Directors of DYE declared a 10% Stock Dividend Market value of DYE Co.'s stock S 5.00 per share Dec. 4 Dec. 22 Dec. 22 f Directorsdo ec alue o s stoc for-1 Stock Split Board of Directors of DYE declared a Cash Dividend of $40,000 S 5.50 per share Payable to Shareholder's of Record on Jan. 15, 2011 Other Information . Net income for 2010 was $190,000 . The company's fiscal year end is December 31, 2010. No other dividends for were declared during 2010 except for those identified above. Required: a) Prepare the Journal Entries (transactions, adjusting and closing) on the dates indicated related to the Dividend information above. If no journal entries are required, write "No Entry Required" ate Account it Dec. 4 Stock Dividend ate ccount it dit Dec. 22 Stock Split Account bit redit Dec. 22 Cash Dividend What amount would appear in the Shareholders' Equity section for DYE Corporation at December 31,2010, for the following items2: 1. b) Common Shares Number of common shares outstanding Retained Earnings Total Shareholders' Equity 2. 3. 4.Explanation / Answer
a. In the book of DYE Co. :
b.
Date Account Titles Debit Credit $ $ Dec 4 Retained Earnings 31,000 Common Stock Dividend Distributable ( 6,200 x $ 5) 31,000 Dec 22 No journal entry required Dec 22 Retained Earnings 40,000 Dividends Payable: Preferred Stock 9,100 Dividends Payable : Common Stock 30,900 Dec 31 Income Summary 190,000 Retained Earnings 190,000Related Questions
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