Question

In: Accounting

3. At September 30, the end of Beijing Company’s third quarter, the following stockholders’ equity accounts...

3. At September 30, the end of Beijing Company’s third quarter, the following stockholders’ equity accounts are reported.


Common stock, $10 par value	$	360,000
Paid-in capital in excess of par value, common stock		90,000
Retained earnings		320,000

In the fourth quarter, the following entries related to its equity are recorded:

Date	General Journal	Debit	Credit
Oct. 2	Retained Earnings	50,000
	Common Dividend Payable		50,000

Oct. 25	Common Dividend Payable	50,000
	Cash		50,000

Oct. 31	Retained Earnings	67,000
	Common Stock Dividend Distributable		32,000
	Paid-In Capital in Excess of Par Value, Common Stock		35,000

Nov. 5	Common Stock Dividend Distributable	32,000
	Common Stock, $10 Par Value		32,000

Dec. 1	Memo—Change the title of the common stock
	account to reflect the new par value of $4.

Dec. 31	Income Summary	250,000
	Retained Earnings		250,000

Required:
Complete the following table showing the equity account balances at each indicated date.

4. The equity sections from Atticus Group’s 2016 and 2017 year-end balance sheets follow.

Stockholders’ Equity (December 31, 2016)
Common stock—$5 par value, 100,000 shares authorized, 35,000 shares issued and outstanding	$175,000
Paid-in capital in excess of par value, common stock	135,000
Retained earnings	340,000
Total stockholders’ equity	$650,000

Stockholders’ Equity (December 31, 2017)
Common stock—$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury	$206,000
Paid-in capital in excess of par value, common stock	178,400
Retained earnings ($50,000 restricted by treasury stock)	420,000
	804,400
Less cost of treasury stock	(50,000)
Total stockholders’ equity	$754,400

The following transactions and events affected its equity during year 2017.

Jan.	5	Declared a $0.50 per share cash dividend, date of record January 10.
Mar.	20	Purchased treasury stock for cash.
Apr.	5	Declared a $0.50 per share cash dividend, date of record April 10.
July	5	Declared a $0.50 per share cash dividend, date of record July 10.
July	31	Declared a 20% stock dividend when the stock’s market value was $12 per share.
Aug.	14	Issued the stock dividend that was declared on July 31.
Oct.	5	Declared a $0.50 per share cash dividend, date of record October 10.

Problem 13-4A Part 1

Required:
1. How many common shares are outstanding on each cash dividend date?

Expert Solution

Answer 3:

	Oct 2	Oct 25	Oct 31	Nov 5	Dec 1	Dec 31
Common Stock	360,000	360,000	360,000	392,000	392,000	392,000
Common stock dividend distributable	0.00	0.00	32,000	0.00	0.00	0.00
Paid-in capital in excess of par, Common stock	90,000	90,000	125,000	125,000	125,000	125,000
Retained earnings	270,000	270,000	203,000	203,000	203,000	453,000
Total equity	720,000	720,000	720,000	720,000	720,000	970,000

explanations:

1. Retained earnings on November 5 = 360,000+32,000 = 392,000

2. Paid in capital on Oct 31 = 90,000+35,000 = 125,000

3. Retained earnings on Oct 2 = 320,000 - 50,000 = 270,000

4. Retained earnings on Oct 31 = 270,000 - 67,000 = 203,000

5. Retained earnings on dec 31 = 203,000 + 250,000 = 453000

6. Total equity = common stock + dividend distributed +paid-in capital+retained earnings

Note: In case of unrelated multiple questions, only the first has to be answered. Thank you. Kindly leave feedback.

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