Question

Part 2:

On January 1, 2018, Caldwell Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:

Mar.     1      Issued 45,000 shares of common stock for $675,000

June      1      Declared a cash dividend of $2.00 per share to stockholders of record on June 15

June    30      Paid the $2.00 cash dividend

Dec.      1      Purchased 4,000 shares of common stock for the treasury for $18 per share

Dec.    15      Declared a cash dividend on outstanding shares of $2.50 per share to stockholders of record on December 31

NOTE: Dividends are only declared and paid on the # shares OUTSTANDING. You need to keep a running total of the # shares outstanding so that your dividends on Dec 15^th are correct.

Required:

Prepare journal entries to record the above transactions.                                           (15 points)

3/1/18	Account Name	Debit	Credit

6/1/18	Account Name	Debit	Credit

6/30/18	Account Name	Debit	Credit

12/1/18	Account Name	Debit	Credit

12/15/18	Account Name	Debit	Credit

Answer 1

3/1/2018	Account Name	Debit	Credit
	Cash	$ 675,000.00
	Common stock		$    45,000.00
	Paid in capital in excess of Par		$ 630,000.00
6/1/2018	Cash dividend	$ 240,000.00
	Cash dividend payable		$ 240,000.00
6/30/2018	Cash dividend payable	$ 240,000.00
	Cash		$ 240,000.00
12/1/2018	Treasury Stock	$    72,000.00
	Cash		$    72,000.00
12/15/2018	Cash dividend	$ 290,000.00
	Cash dividend payable		$ 290,000.00

Working

Beginning shares	75000
New shares issued	45000
Total Outstanding shares on june 15	120000
Dividend per share	$ 2.00
Total Dividend	$ 240,000.00

Total Outstanding shares on june 15	120000
Less: Treasury shares purchased	4000
Outstanding shares on dec 31	116000
Dividend per share	$ 2.50
Total Dividend	$ 290,000.00