Question

On January 1, 2019, Rodgers Corporation had the following stockholders’ equity accounts:

Common Stock ($4 par value, 200,000 shares issued and outstanding)                          $   800,000

Paid-in Capital in Excess of Par Value                                                     2,000,000

Retained Earnings                                                              1,620,000

REQUIRED: For each of the following events, record the necessary journal entry in

                     chronological order taking into account the previous transaction.

                         Show your calculations for potential partial credit. In addition, show the

                         updated number of outstanding shares after each transaction.

(1) Jan. 2    Issued 2,000 shares of common stock in exchange for a commercial

                     building. The fair market value of the building was $62,000 at

                     the time of the stock issuance.

Number of Outstanding Shares after transaction =

(2) Jan. 15   Declared and paid (in one transaction) an $0.80 cash dividend per

                     share to stockholders.

Number of Outstanding Shares after transaction =

(3) Apr. 15 Declared and distributed a 15% stock dividend to stockholders. The   market price of the stock was $19 per share on that date.

Number of Outstanding Shares after transaction =

(4) June 15        Declared and distributed a 70% stock dividend to stockholders. The

                              market price of the stock was $17 per share on that date.

Number of Outstanding Shares after transaction =

(5) Aug. 15        Reacquired 5,000 shares of its own $4 par value stock, previously

                           issued at $14, paying $23 per share in the market.

Number of Outstanding Shares after transaction =

(6) Sept. 15       Reissued 2,000 of the shares purchased on August 15 receiving $25 per

                           share.

Number of Outstanding Shares after transaction =

(7) Oct. 15      Reissued 2,000 of the shares purchased on August 15 receiving $18 per share.

Number of Outstanding Shares after transaction =

(8) Nov. 15     Retired the remaining 1,000 shares held in the Treasury.

Number of Outstanding Shares after transaction =

(9) Nov. 30     Declared a 4-for-1 stock split on all common shares. (Provide a journal

                        entry—not just a memo entry.)

Number of Outstanding Shares after transaction =

(10) Dec. 1     Declared and paid (in one transaction) a $0.90 per share cash dividend to

                        stockholders.

Number of Outstanding Shares after transaction =

Answer 1

Date	General Journal	Debit	Credit
Jan. 2	Building	62,000
	Paid in capital excess of par value - common stock (62000-8000)		54,000
	Common stock, $4 par value (2000*4)		8,000
	(To record issue of Common stock in exchange of building.)
Jan. 15	Cash dividend (202000*0.80)	161,600
	Cash		161,600
	(To record declared and paid the dividend.)
Apr. 15	Stock dividends (202000*15%) (30300*19)	575,700
	Paid in capital excess of par value - common (30300*(19-4))		454,500
	Common stock, $4 par value (30300*4)		121,200
	(To record Stock Dividend Declared and Distributed.) (15% stock dividend (less than 25%) is considered as small dividends and records as market value.)
June 15	Stock dividends (232300*70%) (162610*4)	650,440
	Common stock, $4 par value		650,440
	(To record Stock Dividend Declared and Distributed.) (70% stock dividend (more than 25%) is considered as large dividends and records as par value.)
Aug. 15	Treasury Stock (5000*23)	115,000
	Cash		115,000
	(To record purchased its own stock .)
Sept. 15	Cash (2000*25)	50,000
	Paid in capital from treasury stock transactions (2000*(25-23))		4,000
	Treasury stock (2000*23)		46,000
	(To record treasury stock sold.)
Oct. 15	Cash (2000*18)	36,000
	Paid in capital from treasury stock transactions (as above)	4,000
	Retained earnings (balancing figure)	6,000
	Treasury stock (2000*23)		46,000
	(To record treasury stock sold.)
Nov. 15	Common stock, $4 par value (1000*4)	4,000
	Paid in capital excess of par value - common stock (1000*(23-4))	19,000
	Treasury stock (1000*23)		23,000
	(To record treasury stock retired.)
Nov. 30	Common stock, $4 par value (394910*4)	1,579,640
	Common stock, $1 par value (1579640*1)		1,579,640
	(To record stock split (par value chnaged from $4 to $1).) [Usullay no journal entry made and number of shares and par value per share changed.]
Dec. 1	Cash dividend (1579640*0.90)	1,421,676
	Cash		1,421,676
	(To record declared and paid the dividend.)

Number of Outstanding Shares after transaction
Transactions	Remarks	Answer
1	200000+2000	202,000
2	No effect on outstanding shares	202,000
3	202000+30300	232,300
4	232300+162610	394,910
5	394910-5000	389,910
6	389910+2000	391,910
7	391910+2000	393,910
8	393910+1000	394,910
9	394910*4	1,579,640
10	No effect on outstanding shares	1,579,640