For each of the following independent transactions a through d, prepare the necessary journal entry: (a) Declared a $0.40 per share cash dividend on 300,000 shares of preferred stock outstanding.(b) Declared and distributed an 8% stock dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25.(c) Declared and distributed a 2-for-1 stock split on 400,000 shares of $10 par value common stock outstanding.(d) Declared and distributed a 35% stock dividend on 700,000 common shares of $1 par value common stock outstanding. Market price per common share on this date was $20.
What will be an ideal response?
| ? | ? | ? | |
| (a) | Retained Earnings …………………………… | 120,000 | ? |
| ? | Preferred Cash Dividends Payable ………… | ? | 120,000 |
| ? | ? | ? | ? |
| (b) | Retained Earnings (800,000 * 8% * $25) …… | 1,600,000 | ? |
| ? | Common Stock (800,000 * 8% * $5) ……… | ? | 320,000 |
| ? | Paid-in Capital in Excess of Par Value, Common Stock | ? | 1,280,000 |
| ? | ? | ? | ? |
| ( c) | No journal entry required. Memo: Split common stock 2-for-1. Number of shares outstanding is now 800,000; par value is now $5 per share. |
| ? | ? | ? | ? |
| (d) | Retained Earnings (700,000 * 35% * $1) …… | 245,000 | ? |
| ? | Common Stock …………………...……… | ? | 245,000 |
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