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, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

Jan. 8. Split the common stock 3 for 1 and reduced the par from $42 to $14 per share. After the split, there were 111,000 common shares outstanding.

Jan. 8

Apr. 30. Declared semiannual dividends of $0.90 per share on 8,000 shares of preferred stock and $0.15 per share on the common stock payable on July 1.

Apr. 30

July 1. Paid the cash dividends.

July 1

Oct. 31. Declared semiannual dividends of $0.90 per share on the preferred stock and $0.14 per share on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $25.

Oct. 31

Oct. 31

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

Dec. 31

Dec. 31

Answer 1

Solution:

Journal entries:

Date	Account title	Debit	Credit
Jan 8	No entry
April 30	Dividends [($0.90*8,000)+($0.15*111,000)]	$23,850
	Dividends payable		$23,850
July 1	Dividends payable	$23,850
	Cash		$23,850
Oc t 31	Dividends [($0.90*8,000)+($0.14*111,000)]	$22,740
	Dividends payable		$22,740
Oct 31	Retained earnings (111,000*1%*$25)	$27,750
	Common stock dividend distributable (111,000*1%*$14)		$15,540
	Paid in capital in excess of par [111,000*1%*($25 -$14)]		$12,210
Dec 31	Divdend payable	$22,740
	Cash		$22,740
Dec 31	Common stock dividend distributable	$15,540
	Common stock		$15,540

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