On January 1, 2018, Marx Corporation, a publicly traded company, had these shareholders’ equity accounts: Common...

On January 1, 2018, Marx Corporation, a publicly traded company, had these shareholders’ equity accounts:

Common shares (unlimited number of shares authorized, 233,000 shares issued)		$2,330,000
Retained earnings		1,125,000
Accumulated other comprehensive income		123,000

During the year, the following transactions occurred:

Jan.	15	Declared a $1 per share cash dividend to shareholders of record on January 31, payable February 15.
Apr.	16	Declared a 10% stock dividend to shareholders of record on April 30, distributable May 15. On April 16, April 30, and May 15, the share prices were $16, $14.50, and $15, respectively.
Oct.	1	Effected a 2-for-1 stock split. On October 1, the share price was $18.
Dec.	31	Determined that net income for the year was $692,000. Record the above transactions, including any required entries to close dividends and net income.

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Journal entries
Date	Account Titles and Explanation	Debit	Credit
Jan.15,2018	Retained Earnings	$233,000.00
	Dividend Payable		$233,000.00
	(to record declaration of dividend to common stockholders @ $1 per share)

Feb.15,2018	Dividend Payable	$233,000.00
	Cash		$233,000.00
	(to record payment of dividend declared)

Apr.16,2018	Retained Earnings	$372,800.00
	Stock Dividend Distributable		$372,800.00
	(to record declaration of 10% stock dividend at $16 per share market rate)


Apr.30,2018	Stock Dividend Distributable	$372,800.00
	Common stock		$233,000.00
	Additional Paid in Capital		$139,800.00
	(to record distribution of stock dividend)

Oct.1,2018	For stock split , no entry is required.

Dec.31,2018	Income summary	$692,000.00
	Retained Earnings		$692,000.00
	(to record transfer of net income to retained earnings)

ekkarill92 answered 1 year ago

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