Question

• ITS ALL SAME QUESTION

• XYZ Corporation declared a $.10 cash dividend on the 10,000 shares outstanding.

Prepare the necessary Journal Entries

• Date of Declaration

• Date of Record

• Date of Payment

• On June 15, the company’s board of directors declared a 10% stock dividend to be distributed on July 30^th to the stockholder’s on record for July 3. The company had 200,000 shares of $1 par value stock outstanding with a market value of $20. Prepare the required Journal Entries.

• ABC had a 2:1 stock split. Outstanding shares before the split were 10,000 with a $2 par value and a $20 market value. What would the resulting amounts be after the split?

• LOP, Inc. had a net income of $110,000. There were 190,000 shares outstanding at the beginning of the year. At the end of the year, there were 210,000 shares outstanding. There were 1000 shares of $100 par value, 2% preferred stock outstanding during the year. Determine the basic EPS.

• Cars, Inc. has 3000 shares of $100 par value, 10% preferred stock, and 10,000 shares of $10 par value common stock outstanding. It has declared and paid dividends each year as shown below:

Cumulative P/S

Year	Cash Dividends Declared	Preferred Stock Dividend	P/S Div Per Share	Common Stock Dividend	C/S Div Per Share
Year 1	15,000
Year 2	40,000
Year 3	80,000

Non-Cumulative P/S

Year	Cash Dividends Declared	Preferred Stock Dividend	P/S Div Per Share	Common Stock Dividend	C/S Div Per Share
Year 1	15,000
Year 2	40,000
Year 3	80,000

Answer 1

1.

Account Titles	Debit	Credit
Date of Declaration
Retained Earnings / Dividend	$            1,000
Dividend Payable		$            1,000
Date of Record
NO entry
Date of Payment
Dividend Payable	$            1,000
Cash		$            1,000

2.

Date	Account Titles	Debit	Credit
15-Jun	Retained Earnings / Stock Dividend	$       400,000
	Stock Dividend Distributable		$          20,000
	Paid in Capital in excess of par		$       380,000
30-Jul	Stock Dividend Distributable	$          20,000
	Common Stock		$          20,000

3.
After stock split
Par Value = $1 per share i.e. $2/2
Market Value = $10 per share i.e. $20/2

4.
Average Common Stock Outstanding = (190000+210000)/2 = 200000 shares
Basic EPS = (Net Income - Preferred Dividend) / Average Common Stock Outstanding
= ($110000 - 1000 x $100 x 2%) / 200000 = $0.54 per share

5.
Annual Preference Dividend = 3000 x $100 x 10% = $30000

Cumulative P/S

Year	Cash Dividend Declared	Preferred Stock Dividend	P/S Div Per Share	Common Stock Dividend	C/S Div Per Share
Year 1	$           15,000	$             15,000	$               5.00	$                       -	$                    -
Year 2	$           40,000	$             40,000	$             13.33	$                       -	$                    -
Year 3	$           80,000	$             35,000	$             11.67	$              45,000	$               4.50

Non Cumulative P/S

Year	Cash Dividend Declared	Preferred Stock Dividend	P/S Div Per Share	Common Stock Dividend	C/S Div Per Share
Year 1	$           15,000	$             15,000	$               5.00	$                       -	$                    -
Year 2	$           40,000	$             30,000	$             10.00	$              10,000	$               1.00
Year 3	$           80,000	$             30,000	$             10.00	$              50,000	$               5.00