Question

Entries for Selected Corporate Transactions

Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows:

Instructions:

Journalize the transactions. If no entry is required, select "No Entry Required" from the dropdown box and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank.

Jan. 5. Split the common stock 5 for 1 and reduced the par from $125 to $25 per share. After the split, there were 625,000 common shares outstanding.

Date	Account	Debit	Credit
Jan. 5.	No Entry Required
	No Entry Required

Mar. 10. Purchased 50,000 shares of the corporation's own common stock at $28, recording the stock at cost.

Date	Account	Debit	Credit
Mar. 10.	Treasury Stock
	Cash

Apr. 30. Declared semiannual dividends of $1.4 on 55,000 shares of preferred stock and $0.07 on the common stock to stockholders of record on May 15, payable on June 15.

Date	Account	Debit	Credit
Apr. 30.	Cash Dividends
	Cash Dividends Payable

June 15. Paid the cash dividends.

Date	Account	Debit	Credit
June 15.	Cash Dividends Payable
	Cash

Aug. 20. Sold 36,000 shares of treasury stock at $31, receiving cash.

Date	Account	Debit	Credit
Aug 20.	Cash
	Treasury Stock
	Paid-In Capital from Sale of Treasury Stock

Oct. 15. Declared semiannual dividends of $1.4 on the preferred stock and $0.13 on the common stock (before the stock dividend).

Date	Account	Debit	Credit
Oct. 15.	Cash Dividends
	Cash Dividends Payable

Oct. 15. A 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $33.

Date	Account	Debit	Credit
Oct. 15.	Stock Dividends
	Stock Dividends Distributable
	Paid-In Capital in Excess of Par-Common Stock

Dec. 19. Paid the cash dividends.

Date	Account	Debit	Credit
Dec. 19.	Cash Dividends Payable
	Cash

Dec. 19. Issued the certificates for the common stock dividend.

Date	Account	Debit	Credit
Dec. 31.	Stock Dividends Distributable
	Common Stock

Answer 1

Solution:

Journal Entries - ATV Discount Corporation
Date	Particulars	Debit	Credit
5-Jan	No Entry Required
10-Mar	Treasury stock Dr (50000*$28)	$1,400,000.00
	To Cash		$1,400,000.00
	(To record purchase of own stock)
30-Apr	Cash Dividends Dr [(55000*$1.40) + (625000-50000)*$0.07]	$117,250.00
	To Cash Dividend Payable		$117,250.00
	(To record dividend declared)
15-Jun	Cash Dividend Payable Dr	$117,250.00
	To Cash		$117,250.00
	(To record payment of dividends)
20-Aug	Cash Dr (36000*$31)	$1,116,000.00
	To Treasury stock (36000*$28)		$1,008,000.00
	To Paid in capital from sale of treasury stock		$108,000.00
	(To record reissue of treasury stock)
15-Oct	Cash Dividends Dr [(55000*$1.40) + (625000-14000)*$0.13]	$156,430.00
	To Cash Dividend Payable		$156,430.00
	(To record dividend declared)
15-Oct	Stock dividends Dr [(625000 - 14000)*2%*$33]	$403,260.00
	To Stock dividend distributable		$305,500.00
	To Paid in capital in excess of par - common stock		$97,760.00
	(To record stock dividend declared)
19-Dec	Cash Dividend Payable Dr	$156,430.00
	To Cash		$156,430.00
	(To record payment of dividends)
19-Dec	Stock dividend distributable Dr	$305,500.00
	To Common stock		$305,500.00
	(To record stock dividend distributed)