Question

Selected Dividend Transactions, Stock Split

Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows:

Journalize the transactions.

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

Jan. 8.   Split the common stock 2 for 1 and reduced the par from $48 to $24 per share. After the split, there were 87,000 common shares outstanding.

Jan. 8	No Entry Required
	No Entry Required

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Review the effect of stock splits on equity accounts.

Apr. 30.   Declared semiannual dividends of $1.6 on 6,000 shares of preferred stock and $0.14 on the common stock payable on July 1.

Apr. 30	Cash Dividends
	Cash Dividends Payable

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When a company declares a dividend it becomes legally binding.

July 1.   Paid the cash dividends.

July 1	Cash Dividends Payable
	Cash

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What are the stockholders\' receiving from the corporation?

Oct. 31.   Declared semiannual dividends of $1.6 on the preferred stock and $0.12 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $43.

Cash Dividends	Cash Dividends
	Cash Dividends Payable
Stock dividends	Stock Dividends
	Stock Dividends Distributable
	Paid-In Capital in Excess of Par-Common Stock

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On the date of declaration of a cash dividend, it becomes legally binding. How do stock dividends affect stockholders\' equity?

Dec. 31.   Paid the cash dividends and issued the certificates for the common stock dividend.

Payment	Cash Dividends Payable
	Cash
Issuance	Stock Dividends Distributable
	Common Stock

Answer 1

1/8 No entry required

4/30 DR Dividends 55,500 (18,000*.75 +150,000*.28)

CR Dividends Payable 55,500

7/1 DR Dividends Payable 55,500

CR Cash 55,500

10/31 DR Dividends 34,500 (150,000*.14 + 18,000*.75)

CR Dividends Payable 34,500

DR Retained earnings 390,000 (150,000*.05* 52)

CR Common Stock Dividend Distributable 300,000 (150,000 *.05 * 40(par value))

CR Paid in capital in excess of par 90,000 (150,000*.05*(52-40))

12/31 DR Dividends Payable 34,500

CR Cash 34,500

DR Common Stock Dividend distributable 300,000

CR Common Stock 300,000

 300,000