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 1 year ago

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