Question

On January 1, 2020, Crane Corporation had the following stockholders’ equity accounts. Common Stock ($26 par value, 56,500 shares issued and outstanding) $1,469,000 Paid-in Capital in Excess of Par—Common Stock 200,000 Retained Earnings 611,000 During the year, the following transactions occurred. Feb. 1 Declared a $2 cash dividend per share to stockholders of record on February 15, payable March 1. Mar. 1 Paid the dividend declared in February. Apr. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $38. July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $15 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.30 per share dividend to stockholders of record on December 15, payable January 5, 2021. 31 Determined that net income for the year was $398,500.

(a)

Journalize the transactions and the closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Date	Account Titles	Debit	Credit
Feb-01	Cash Dividend	$              1,13,000		=56500*2
	Dividend Payable		$       1,13,000
Mar-01	Dividend Payable	$              1,13,000
	Cash		$       1,13,000
Apr-01	No entry
	Shares issued and outstanding increased to 113000 shares with $13 par value
Jul-01	Stock Dividend	$              1,69,500		=113000*10%*15
	Stock Dividend Distributable		$       1,46,900	=113000*10%*13
	Paid in Capital in excess of par-common		$          22,600	=169500-146900
Jul-31	Stock Dividend Distributable	$              1,46,900
	Common Stock		$       1,46,900
Dec-01	Cash Dividend	$                 37,290		=(113000+11300)*0.3
	Dividend Payable		$          37,290
Dec-31	Income Summary	$              3,98,500
	Retained Earnings		$       3,98,500
Dec-31	Retained Earnings	$              3,19,790
	Cash Dividend		$       1,50,290
	Stock Dividend		$       1,69,500