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Exercise 12.7 Cash dividends, stock dividends, and share splits L.O. 4 HiTech Manufacturing Company has 1,000,000...

Exercise 12.7 Cash dividends, stock dividends, and share splits L.O. 4

HiTech Manufacturing Company has 1,000,000 shares of $1 par value share capital outstanding on January 1. The following equity transactions occurred during the current year:
Apr. 30

Distributed additional shares capital in a 2-for-1 share split. Market price of shares was $36 per share.
June   1 Declared a cash dividend of $0.96 per share.
July   1 Paid the $0.96 cash dividend to shareholders.
Aug. 1

Declared a 5 percent stock dividend. Market price of share was $19 per share.
Sept. 10

Issued shares resulting from the 5 percent stock dividend declared on August 1.
a. Prepare journal entries to record the above transactions. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
June   1   (Click to select)CashAdditional paid-in capital: Stock dividendsDividendsRetained earningsCommon stockInterest revenueStock dividend to be distributedDividends payable       
       (Click to select)Interest revenueRetained earningsCommon stockDividends payableDividendsStock dividends to be distributedAdditional paid-in capital: Stock dividendsCash    
July    1   (Click to select)Common stockInterest revenueDividends payableCashRetained earningsAdditional paid-in capital: Stock dividendsStock dividends to be distributedDividends      
       (Click to select)DividendRetained earningsDividends payableCommon stockInterest revenueAdditional paid-in capital: Stock dividendsCashStock dividends to be distributed    
Aug.   1   (Click to select)CashRetained earningsDividends payableCommon stockAdditional paid-in capital: Stock dividendsAccounts payableDividendsStock dividends to be distributed      
       (Click to select)CashDividends payableDividendsAccounts payableAdditional paid-in capital: Stock dividendsRetained earningsStock dividend to be distributedAccounts receivable    
       (Click to select)Dividends payableAdditional paid-in capital: Stock dividendsAccounts payableDividendsCashRetained earningsAccounts receivableStock dividend to be distributed    
Sept. 10   (Click to select)Additional paid-in capital: Stock dividendsRetained earningsStock dividend to be distributedDividends payableInterest revenueDividendsCommon stockCash      
       (Click to select)Interest revenueAdditional paid-in capital: Stock dividendsDividends payableCommon stockStock dividend to be distributedRetained earningsCashDividends    
b. Compute the number of shares of share capital outstanding at year-end.
  Number of shares shares
c.

What is the par value per share of HiTech Manufacturing share at the end of the year? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
  Par value per share $   
d.

Determine the effect of each of the following on total shareholders' equity: share split, declaration and payment of a cash dividend, declaration and distribution of a share dividend.
  Share split (Click to select)Increase retained earningsDecrease retained earningsNo effect
  Declaration / payment of cash dividend (Click to select)No effectIncrease retained earningsDecrease retained earnings
  Declaration / distribution of share dividend (Click to select)Increase retained earningsNo effectDecrease retained earnings

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