Question

In: Accounting

The following data were taken from the SFP accounts of Bramble Corporation on December 31, 2020:...

The following data were taken from the SFP accounts of Bramble Corporation on December 31, 2020:

Current assets $ 1,035,000
FV-NI investments 842,000
Common shares (unlimited authorized, 590,000 shares issued and outstanding) 6,490,000
Contributed surplus 360,000
Retained earnings 1,790,000

A 8% stock dividend is declared at their fair value and distributed at a time when the shares’ fair value is $51 per share. Prepare the required journal entries. (Credit account titles are automatically indented when the 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.)

Account Titles and Explanation

Debit

Credit

(To record stock dividend declaration)

(To record stock dividend distribution)

  

  

A 3-for-1 stock split is effected. Prepare the required journal entry. (Credit account titles are automatically indented when the 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.)

Account Titles and Explanation

Debit

Credit

  

  

A dividend in kind is declared on January 8, 2021 and paid on January 28, 2021 in FV-NI investments. The investments have a carrying amount of $140,000 (fair value at December 31, 2020) and a January 8 fair value of $148,000. Prepare the required journal entries. (Credit account titles are automatically indented when the 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.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 8

(To record fair value adjustment)

Jan. 8

(To record declaration of property dividend)

Jan 28

Solutions

Expert Solution

SOLUTION : 1
CALCULATION OF TOTAL VALUE OF STOCK DIVIDEND IS PAID
Numer of Common Shares Issued and outstanding = (A)                      590,000 Shares
Stock Dividend Declared % of total shares issued and outstanding (B) 8%
Stock Dividend Declared Shares to be issued (C = AXB)                         47,200 Shares
Market Value of 1 Shares on date of declaration (D) $                       51.00 Per Shares
Par Value of the one shares ($ 6,490,000 / 590,000) ('E) $                       10.85 Per Shares
Addittional Paid in Captial (Market Value - Par Value) (F) $                       40.15 Per Shares
Total value of dividend = (CXD) $              2,407,200
Par value of the Common Stock Dividend (CXE) $                  512,000
Value of Addittional paid in Capital (CXF) $              1,895,200
Journal Entries
Sr. No. Date Account Title and explanation Debit Credit
1 ---------- Stock Dividends $              2,407,200
             Stock Dividend Distributable $                   512,000
             Paid in Capital in Excess of Par - Common Stock $                1,895,200
(To record the stock dividend declaration)
3 ---------- Stock Dividend Distributable $                  512,000
         Common Stock $                   512,000
(To record the stock dividend distribtion)
SOLUTION : 2
Journal Entries
Sr. No. Date Account Title and explanation Debit Credit
1 ----------
"No Entry" is required for Stock Split.
In Stock split only par value is reduced in same proportion of split and number
of shares are increases.
SOLUTION : 3
Journal Entries
Sr. No. Date Account Title and explanation Debit Credit
1 Jan.08 Investment $                       8,000
          Gain on Appreciation on investment $                        8,000
(To record the value of adjustement)
2 Jan.08 Retained Earnings $                  148,000
             Property Dividend Payable $                   148,000
(To record the Property dividend declaration)
3 Jan.28 Property Dividend Payable $                  148,000
        Investment $                   148,000
(To record the distribtion of Property Dividend)

Related Solutions

The following data were taken from the balance sheet accounts of Splish Corporation on December 31,...
The following data were taken from the balance sheet accounts of Splish Corporation on December 31, 2016. Current assets $515,000 Debt investments 640,000 Common stock (par value $10) 475,000 Paid-in capital in excess of par 145,000 Retained earnings 796,000 Prepare the required journal entries for the following unrelated items. (a) A 4% stock dividend is (1) declared and (2) distributed at a time when the market price per share is $41. (b) The par value of the common stock is...
The following data were taken from the balance sheet accounts of Sunland Corporation on December 31,...
The following data were taken from the balance sheet accounts of Sunland Corporation on December 31, 2016. Current assets $530,000 Debt investments 651,000 Common stock (par value $10) 502,000 Paid-in capital in excess of par 152,000 Retained earnings 826,000 Prepare the required journal entries for the following unrelated items. (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...
The following data were taken from the balance sheet accounts of Masefield Corporation on December 31,...
The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2016. Current assets $540,000 Debt investments (trading) 624,000 Common stock (par value $10) 500,000 Paid-in capital in excess of par 150,000 Retained earnings 840,000 Instructions Prepare the required journal entries for the following unrelated items. (a) A 30% stock dividend is declared and distributed at a time when the market price per share is $39. (b) The par value of the common stock is...
The following data are taken from the records of Alee Company.    December 31, 2020    December 31,...
The following data are taken from the records of Alee Company.    December 31, 2020    December 31, 2019 Cash $ 15,000 $  8,000 Current assets other than cash   85,000   60,000 Long-term debt investments   10,000   53,000 Plant assets  335,000  215,000 $445,000 $336,000 Accumulated depreciation $ 20,000 $ 40,000 Current liabilities   40,000   22,000 Bonds payable   75,000 –0– Common stock  254,000  254,000 Retained earnings   56,000   20,000 $445,000 $336,000 Additional information: Held-to-maturity debt securities carried at a cost of $43,000 on December 31, 2019, were...
The following list of accounts is taken from the December 31, 2020, unadjusted trial balance of...
The following list of accounts is taken from the December 31, 2020, unadjusted trial balance of Perdu Sales, a business that is owned by Eldon Perdu. Debit Credit Cash $ 8,000 Merchandise inventory 9,800 Prepaid selling expense 8,000 Store equipment 40,000 Accumulated depreciation, store equipment $ 9,800 Accounts payable 14,840 Salaries payable 0 Eldon Perdu, capital 25,360 Eldon Perdu, withdrawals 3,600 Sales 858,000 Sales returns and allowances 33,000 Sales discounts 8,000 Cost of goods sold 431,000 Sales salaries expense 94,000...
The comparative statement of financial position of Bramble Corporation as at December 31, 2020, follows: BRAMBLE...
The comparative statement of financial position of Bramble Corporation as at December 31, 2020, follows: BRAMBLE CORPORATION Statement of Financial Position December 31 December 31 Assets 2020 2019 Cash $ 54,000 $ 14,700 Accounts receivable 89,600 88,600 Equipment 26,700 21,300 Less: Accumulated depreciation (10,300 ) (10,900 ) Total $ 160,000 $ 113,700 Liabilities and Shareholders’ Equity Accounts payable $ 19,600 $ 15,800 Common shares 100,000 80,100 Retained earnings 40,400 17,800 Total $ 160,000 $ 113,700 Net income of $36,100 was...
The following trial balance was taken from the books of Venus Corporation at December 31, 2020:...
The following trial balance was taken from the books of Venus Corporation at December 31, 2020: Account                                                                                                           Debit            Credit Cash........................................................................................................... $   40,000 Accounts Receivable.................................................................................... 106,000 Prepaid Rent ...............................................................................................     12,800                   Note Receivable................................................................................................ 8,000 Merchandise Inventory................................................................................... 54,000 Unexpired Insurance......................................................................................... 4,800 Furniture and Equipment.............................................................................. 138,000 Accumulated Depreciation........................................................................................         15,000 Accounts Payable.......................................................................................................         12,600 Common Shares.........................................................................................................         44,000 Retained Earnings......................................................................................................         65,000 Sales...........................................................................................................................       410,000 Cost of Goods Sold....................................................................................... 128,000 Salaries Expense............................................................................................. 53,000        Totals.................................................................................................. $ 546,600   $ 546,600 At year end, the following...
The following trial balance was taken from the books of Venus Corporation at December 31, 2020:...
The following trial balance was taken from the books of Venus Corporation at December 31, 2020: Account                                                                                                           Debit            Credit Cash.........................................................................................................    $   40,000 Accounts Receivable...............................................................................       106,000 Prepaid Rent ...........................................................................................         12,800                   Note Receivable......................................................................................           8,000 Merchandise Inventory...........................................................................         54,000 Unexpired Insurance...............................................................................           4,800 Furniture and Equipment........................................................................       138,000 Accumulated Depreciation......................................................................                            15,000 Accounts Payable....................................................................................                            12,600 Common Shares......................................................................................                            44,000 Retained Earnings...................................................................................                            65,000 Sales........................................................................................................                          410,000 Cost of Goods Sold................................................................................       128,000 Salaries Expense......................................................................................         53,000        Totals...................................................................................................
The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest...
The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest revenue $87,950 Accumulated depreciation—equipment $41,950 Cash 52,950 Accumulated depreciation—buildings 29,950 Sales revenue 1,381,950 Notes receivable 156,950 Accounts receivable 151,950 Selling expenses 195,950 Prepaid insurance 21,950 Accounts payable 171,950 Sales returns and allowances 151,950 Bonds payable 101,950 Allowance for doubtful accounts 8,950 Administrative and general expenses 98,950 Sales discounts 46,950 Accrued liabilities 33,950 Land 101,950 Interest expense 61,950 Equipment 201,950 Notes payable 101,950 Buildings 141,950...
Presented below are data taken from the records of Blue Company. December 31, 2020 December 31,...
Presented below are data taken from the records of Blue Company. December 31, 2020 December 31, 2019 Cash $15,100 $7,900 Current assets other than cash 85,600 59,800 Long-term investments 9,900 53,500 Plant assets 333,500 213,200 $444,100 $334,400 Accumulated depreciation $19,800 $40,000 Current liabilities 39,800 22,000 Bonds payable 75,100 –0– Common stock 252,600 252,600 Retained earnings 56,800 19,800 $444,100 $334,400 Additional information: 1. Held-to-maturity debt securities carried at a cost of $43,600 on December 31, 2019, were sold in 2020 for...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT