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The equity sections for Upperchurch Group at the beginning of the year (January 1) and end...

The equity sections for Upperchurch Group at the beginning of the year (January 1) and end of the year (December 31) follow.

Stockholders’ Equity (January 1)

Common stock—$10 par value, 130,000 shares authorized, 50,000 shares issued and outstanding $ 500,000 Paid-in capital in excess of par value, common stock 75,000 Retained earnings 410,000 Total stockholders’ equity $ 985,000 Stockholders’ Equity (December 31) Common stock—$10 par value, 130,000 shares authorized, 55,520 shares issued, 4,000 shares in treasury $ 555,200 Paid-in capital in excess of par value, common stock 141,240 Retained earnings ($80,000 restricted by treasury stock) 740,000 1,436,440 Less cost of treasury stock (80,000 ) Total stockholders’ equity $ 1,356,440 The following transactions and events affected its equity during the year. Jan. 5 Declared a $1.80 per share cash dividend, payable on January 10. Mar. 20 Purchased treasury stock for cash. Apr. 5 Declared a $1.80 per share cash dividend, payable on April 10. July 5 Declared a $1.80 per share cash dividend, payable on July 10. July 31 Declared a 12% stock dividend when the stock’s market value was $22 per share. Aug. 14 Issued the stock dividend that was declared on July 31. Oct. 5 Declared a $1.80 per share cash dividend, date of record October 10.

Record Journal Entries, Cash Dividends and Stock Dividends.

Solutions

Expert Solution

Date General Journal Debit Credit
Jan. 5 Cash dividends (50000 x $1.80) 90000
Dividends payable 90000
(To record declaration of cash dividends)
Jan. 10 Dividends payable 90000
Cash 90000
(To record payment of cash dividends declared)
Mar. 20 Treasury stock 80000
Cash 80000
(To record purchase of treasury stock)
Apr. 5 Cash dividends [(50000 - 4000) = 46000 x $1.80] 82800
Dividends payable 82800
(To record declaration of cash dividends)
Apr. 10 Dividends payable 82800
Cash 82800
(To record payment of cash dividends declared)
Jul. 5 Cash dividends (46000 x $1.80) 82800
Dividends payable 82800
(To record declaration of cash dividends)
Jul. 10 Dividends payable 82800
Cash 82800
(To record payment of cash dividends declared)
Jul. 31 Stock dividends [12% x (50000 - 4000) = 5520 x $22] 121440
Stock dividends distributable (5520 x $10) 55200
Paid-in capital in excess of par value, common stock 66240
(To record declaration of stock dividends)
Aug. 14 Stock dividends distributable 55200
Common stock 55200
(To record distribution of stock dividends)
Oct. 5 Cash dividends [(46000 + 5520) = 51520 x $1.80] 92736
Dividends payable 92736
(To record declaration of cash dividends)
Oct. 10 No journal entry required

ekkarill92 answered 2 years ago
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