Stock Dividends The Stockholders' Equity section of Merriwether Corp.'s balance sheet as of January 1, 2017,...

Stock Dividends

The Stockholders' Equity section of Merriwether Corp.'s balance sheet as of January 1, 2017, appeared as follows:

Common stock, $10 par, 49,000 shares issued and outstanding	$490,000
Additional paid-in capital	100,000
Retained earnings	400,000
Total stockholders' equity	$990,000

The following transactions occurred during 2017:

Declared a 10% stock dividend to common stockholders on January 15. At the time of the dividend, the common stock was selling for $30 per share. The stock dividend was to be issued to stockholders on January 30, 2017.
Distributed the stock dividend to the stockholders on January 30, 2017.

Required:

1. Identify and analyze the effect of each transaction.

a. Declared a 10% stock dividend to common stockholders on January 15. At the time of the dividend, the common stock was selling for $30 per share. The stock dividend was to be issued to stockholders on January 30, 2017.

b. Distributed the stock dividend to the stockholders on January 30, 2017.

Activity	Operating Investing Financing Financing and Investing Financing and Operating
Accounts	Common Stock Dividend Distributable Increase, Common Stock Increase Common Stock Dividend Distributable Increase, Common Stock Decrease Common Stock Dividend Distributable Decrease, Common Stock Increase Common Stock Dividend Distributable Decrease, Common Stock Decrease
Statement(s)	Balance Sheet only Income Statement only Balance Sheet and Income Statement

2. Develop the Stockholders' Equity category of Merriwether Corp.'s balance sheet as of January 31, 2017, after the stock dividend was issued.

Merriwether Corp.
Partial Balance Sheet
January 31, 2017
Stockholders' equity
Common stock Common stock dividend distributable Common stock, $10 par, 53,900 shares issued and outstanding	$
Additional paid-in capital-common stock Common stock Common stock dividend distributable
Common stock Common stock dividend distributable Retained earnings
Total stockholders' equity	$

Feedback

These transactions

increase
decrease
did not change

total stockholders' equity. They reclassified some equity from the

retained earnings
contributed capital

category to the

retained earnings
contributed capital

category.

Solutions

Expert Solution

These transactions did not change the total stockholders' equity. They reclassified some retained earnings from the retained earnings to contributed capital category.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared...

Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared as follows: Common stock, $10 par, 10,000 shares issued and outstanding $100,000 Additional paid-in capital 50,000 Retained earnings 80,000 Total stockholders’ equity $230,000 Required: 1. Identify and analyze the effect of each transaction. The following transactions occurred during 2017: a. Reacquired 1,800 shares of common stock at $20 per share on July 1. Activity Financing Accounts Cash Decrease, Treasury Stock Increase Statement(s) Balance Sheet...

Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared...

Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared as follows: Common stock, $10 par, 10,000 shares issued and outstanding $100,000 Additional paid-in capital 50,000 Retained earnings 80,000 Total stockholders’ equity $230,000 Required: 1. Identify and analyze the effect of each transaction. The following transactions occurred during 2017: a. Reacquired 1,400 shares of common stock at $20 per share on July 1. Activity Accounts Statement(s) How does this entry affect the accounting equation?...

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of...

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $40 par value, 5,000 shares authorized, ? shares issued $200,000 Common stock, ? par, 10,000 shares authorized, 10,000 shares issued 100,000 Additional paid-in capital—Preferred 9,000 Additional paid-in capital—Common 800,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $1,111,000 Retained earnings 39,000 Treasury stock, preferred, 100 shares (3,300) Total stockholders’ equity $ ? Required: Determine the following items...

January 1, 2017, the stockholders’ equity section of Jayhawk Corporation’s balance sheet showed the following Preferred...

January 1, 2017, the stockholders’ equity section of Jayhawk Corporation’s balance sheet showed the following Preferred stock, $100 par value, 5%, 50,000 shares authorized, 5,000 shares issued and outstanding $500,000 Paid in capital in excess of par, Preferred Stock 100,000 Common stock, $3 par value, 500,000 shares authorized, 20,000 shares issued and outstanding 60,000 Paid in capital in excess of par, Common Stock 250,000 Total contributed Capital 910,000 Retained Earnings 320,000 Total Stockholders' Equity $1,230,000 During the year, 2017, the...

The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $3...

The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $3 par value, 300,000 shares authorized, 60,000 shares 180,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 240,000 From treasury stock 15,000 255,000 Retained earnings 174,000 609,000 Less: Treasury stock (6,000 shares) at cost 69,000 Total Stockholdersâ€™ Equity 540,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock...

The Stockholders’ Equity section of the balance sheet of Willy Corporation on January 1, 2016, is...

The Stockholders’ Equity section of the balance sheet of Willy Corporation on January 1, 2016, is shown below; selected transactions for the year follow: Stockholders’ Equity Preferred Stock (10% cumulative, $10 par value, 200,000 shares authorized) Issued and Outstanding, 7,300 Shares $ 73,000 Paid-in Capital in Excess of Par Value 7,300 $ 80,300 Common Stock (no-par value, $50 stated value, 130,000 shares authorized) Issued and Outstanding, 1,300 Shares 65,000 Paid-in Capital in Excess of Stated Value 2,600 67,600 Total...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $10 par value, 300,000 shares authorized, 60,000 shares 600,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 960,000 From treasury stock 60,000 1,020,000 Retained earnings 696,000 2,316,000 Less: Treasury stock (6,000 shares) at cost 276,000 Total Stockholdersâ€™ Equity 2,040,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January...

Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January 1 follows: Common stock, $5 par value, 300,000 shares authorized, 60,000 shares $300,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value $480,000 From treasury stock 30,000 510,000 Retained earnings 348,000 1,158,000 Less: Treasury stock (6,000 shares) at cost 138,000 Total Stockholders’ Equity $1,020,000 The following transactions affecting stockholders’ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $8 par value, 300,000 shares authorized, 60,000 shares 480,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 720,000 From treasury stock 45,000 765,000 Retained earnings 522,000 1,767,000 Less: Treasury stock (6,000 shares) at cost 207,000 Total Stockholdersâ€™ Equity 1,560,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Dividends and Stock Splits On January 1, 2017, Frederiksen Inc.'s Stockholders' Equity category appeared as follows:...

Dividends and Stock Splits On January 1, 2017, Frederiksen Inc.'s Stockholders' Equity category appeared as follows: Preferred stock, $80 par value, 7%, 3,000 shares issued and outstanding $240,000 Common stock, $10 par value, 15,000 shares issued and outstanding 150,000 Additional paid-in capital—Preferred 60,000 Additional paid-in capital—Common 225,000 Total contributed capital $675,000 Retained earnings 2,100,000 Total stockholders’ equity $2,775,000 The preferred stock is noncumulative and nonparticipating. During 2017, the following transactions occurred: On March 1, declared a cash dividend of $16,800...

Subjects