In: Accounting
Listed below are the transactions that affected the
shareholders’ equity of Branch-Rickie Corporation during the period...
Listed below are the transactions that affected the
shareholders’ equity of Branch-Rickie Corporation during the period
2021–2023. At December 31, 2020, the corporation’s accounts
included:
|
($ in thousands) |
Common stock, 108 million shares at $1 par |
$ |
108,000 |
|
Paid-in capital—excess of par |
|
648,000 |
|
Retained earnings |
|
870,000 |
|
|
- November 1, 2021, the board of directors declared a cash
dividend of $0.90 per share on its common shares, payable to
shareholders of record November 15, to be paid December 1.
- On March 1, 2022, the board of directors declared a property
dividend consisting of corporate bonds of Warner Corporation that
Branch-Rickie was holding as an investment. The bonds had a fair
value of $2.3 million, but were purchased two years previously for
$2.0 million. Because they were intended to be held to maturity,
the bonds had not been previously written up. The property dividend
was payable to shareholders of record March 13, to be distributed
April 5.
- On July 12, 2022, the corporation declared and distributed a 8%
common stock dividend (when the market value of the common stock
was $15 per share). Cash was paid in lieu of fractional shares
representing 640,000 equivalent whole shares.
- On November 1, 2022, the board of directors declared a cash
dividend of $0.90 per share on its common shares, payable to
shareholders of record November 15, to be paid December 1.
- On January 15, 2023, the board of directors declared and
distributed a 3-for-2 stock split effected in the form of a 50%
stock dividend when the market value of the common stock was $16
per share.
- On November 1, 2023, the board of directors declared a cash
dividend of $0.75 per share on its common shares, payable to
shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie
recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders’
equity for Branch-Rickie for the three-year period ($ in 000s). Net
income was $370 million, $435 million, and $495 million for 2021,
2022, and 2023, respectively.