Question

Problem #1 Dividends Per Share
Seacrest Company has 10,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends:
Year 1   $25,000
Year 2   4,000
Year 3   30,000
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
    Year 1   Year 2   Year 3
Preferred stock (Dividends per share)   $_____ $_____ $_______
Common stock (Dividends per share)   $_____. $_____. $_______

Problem #2

Pro-Builders Corporation has 1,500,000 shares of $5 par common stock outstanding. On September 2, Pro-Builders Corporation declared a 3% stock dividend to be issued November 30 to stockholders of record on October 3. The market price of the stock was $36 per share on September 2.

Journalize the entries required on September 2, October 3, and November 30. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSPro-Builders CorporationGeneral Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense

Answer 1

Solution 1:

	Year 1	Year 2	Year 3
Total dividend Paid (A)	$25,000	$4,000	$30,000
Less: Total Preferred Dividend paid
Preferred Dividend Paid for current year	$10,000	$4,000	$10,000
Arrears of Preferred Dividend Paid	$0	$0	$6,000
Total Preferred dividend paid (B)	$10,000	$4,000	$16,000
Total Common Dividend paid (A-B)	$15,000	$0	$14,000

	Year 1	Year 2	Year 3
Preferred Stock (dividend per share) (Total / Number of shares)	$1.00	$0.40	$1.60
Common Stock (dividend per share) (Total / Number of shares)	$0.30	$0.00	$0.28

Solution 2:

Date	Accounts Title and explanation	Debit	Credit
02-Sep	Stock Dividends Dr (1500000*$36)	$5,40,00,000
	To Stock Dividend Distributable (1500000*$5)		$75,00,000
	To Paid in capital in excess of Par - Common Stock		$4,65,00,000
	(To record declaration of Stock Dividend)
03-Oct	No journal entry required.
30-Nov	Stock Dividend Distributable Dr	$75,00,000
	To Common Stock		$75,00,000
	(To record Distribution of stock Dividend)