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In: Accounting
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31, 2020:
| Paid-in capital: | |||
| Preferred stock, 7.5%, 98,000 shares at $1 par | $ | 98,000 | |
| Common stock, 484,800 shares at $1 par | 484,800 | ||
| Paid-in capital—excess of par, preferred | 1,595,000 | ||
| Paid-in capital—excess of par, common | 2,645,000 | ||
| Retained earnings | 9,745,000 | ||
| Treasury stock, at cost; 4,800 common shares | (52,800 | ) | |
| Total shareholders' equity | $ | 14,515,000 | |
During 2021, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:
1. Prepare the appropriate entries for these
events. THERE SHOULD BE 12 TOTAL JOURNAL ENTRIES.
- On March 3, the board of directors declared a property dividend of 290,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $552,000). The investment shares had a fair value of $2 per share and were distributed March 31 to shareholders of record March 15.
- On May 3, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share.
- On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share.
- On December 1, the board of directors declared the 7.5% cash dividend on the 98,000 preferred shares, payable on December 28 to shareholders of record December 20.
- On December 1, the board of directors declared a cash dividend of $0.50 per share on its common shares, payable on December 28 to shareholders of record December 20.
2. Prepare the shareholders' equity section of the
balance sheet for Consolidated Paper, Inc., at December 31, 2021.
Net income for the year was $880,000.
Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Inc. at December 31, 2021. Net income for the year was $880,000. (Negative amounts should be indicated by a minus sign.)
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Solutions
Expert Solution
1.
| No. | Date | General Journal | Debit | Credit |
| 1 | March 03 | Investment in Leasco International | 28000 | |
| Gain on appreciation [(290000 x $2) - $552000] | 28000 | |||
| (To record investment at fair value) | ||||
| 2 | March 03 | Retained earnings | 580000 | |
| Dividends payable | 580000 | |||
| (To record declaration of property dividend) | ||||
| 3 | March 15 | No journal entry required | ||
| 4 | March 31 | Dividends payable | 580000 | |
| Investment in Leasco International | 580000 | |||
| (To record distribution of property dividend) | ||||
| 5 | May 03 | Paid-in capital -excess of par, common stock | 120000 | |
| Common stock [(25% x 480000) x $1] | 120000 | |||
| (To record declaration and distribution of stock dividend) | ||||
| 6 | July 05 | Retained earnings [1% x (480000 + 120000) x $11] | 66000 | |
| Common stock [1% x (480000 + 120000) x $1] | 6000 | |||
| Paid-in-capital-excess of par, common stock | 60000 | |||
| (To record declaration and distribution of stock dividend) | ||||
| 7 | December 01 | Retained earnings | 7350 | |
| Dividends payable ($98000 x 7.5%) | 7350 | |||
| (To record declaration of cash dividends on preferred stock) | ||||
| 8 | December 20 | No journal entry required | ||
| 9 | December 28 | Dividends payable | 7350 | |
| Cash | 7350 | |||
| (To record distribution of preferred cash dividends) | ||||
| 10 | December 01 | Retained earnings | 303000 | |
| Dividends payable [$0.50 x (480000 + 120000 + 6000)] | 303000 | |||
| (To record declaration of cash dividends on common stock) | ||||
| 11 | December 20 | No journal entry required | ||
| 12 | December 28 | Dividends payable | 303000 | |
| Cash | 303000 | |||
| (To record distribution of cash dividends on common stock) | ||||
Please note: Treasury stocks are excluded for all computations of dividends.
2.
| CONSOLIDATED PAPER, INC., | |
| [Shareholders' Equity section] | |
| December 31, 2021 | |
| Paid-in capital: | |
| Preferred stock, 7.5%, 98,000 shares at $1 par | 98000 |
| Common stock, 610,800 shares at $1 par | 610800 |
| Paid-in capital-excess of par, preferred | 1595000 |
| Paid-in capital-excess of par, common | 2525000 |
| Retained earnings | 9668650 |
| Treasury stock, at cost; 4,000 common shares | -52800 |
| Total shareholders' equity | 14444650 |
Working:
| Retained earnings, beginning balance | 9745000 |
| Add: Net income | 880000 |
| 10625000 | |
| Less: Property dividend | -580000 |
| Less: Stock dividends | -66000 |
| Less: Cash dividend-preferred | -7350 |
| Less: Cash dividend-common | -303000 |
| Retained earnings, ending balance | 9668650 |
ekkarill92 answered 1 year agoRelated Solutions
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2017:
Paid-in
capital:
Preferred stock, 8.5%, 94,000
shares at $1 par
$
94,000
Common stock, 444,400 shares at
$1 par
444,400
Paid-in capital—excess of par,
preferred
1,555,000
Paid-in capital—excess of par,
common
2,605,000
Retained earnings
9,345,000
Treasury stock, at cost; 4,400
common shares
(44,000
)
Total shareholders' equity
$
13,999,400
During 2018, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2017:
Paid-in
capital:
Preferred stock, 7.5%, 82,000
shares at $1 par
$
82,000
Common stock, 323,200 shares at
$1 par
323,200
Paid-in capital—excess of par,
preferred
1,445,000
Paid-in capital—excess of par,
common
2,495,000
Retained earnings
8,245,000
Treasury stock, at cost; 3,200
common shares
(38,400
)
Total shareholders' equity
$
12,551,800
During 2018, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31, 2017:
Paid-in capital: Preferred stock, 7.0%, 91,000 shares at $1 par $
91,000 Common stock, 414,100 shares at $1 par 414,100 Paid-in
capital—excess of par, preferred 1,525,000 Paid-in capital—excess
of par, common 2,575,000 Retained earnings 9,045,000 Treasury
stock, at cost; 4,100 common shares (41,000 ) Total shareholders'
equity $ 13,609,100 During 2018, several events and transactions
affected the retained earnings of Consolidated Paper. Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2017:
Paid-in capital:
Preferred stock, 8.0%, 85,000 shares at $1 par
$
85,000
Common stock, 353,500 shares at $1 par
353,500
Paid-in capital—excess of par, preferred
1,475,000
Paid-in capital—excess of par, common
2,525,000
Retained earnings
8,545,000
Treasury stock, at cost; 3,500 common shares
(38,500
)
Total shareholders' equity
$
12,945,000
During 2018, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31, 2015:
Paid-in capital:
Preferred stock, 8.8%,
90,000 shares at $1 par
$
90,000
Common stock, 364,000
shares at $1 par
364,000
Paid-in capital—excess of
par, preferred
1,437,000
Paid-in capital—excess of
par, common
2,574,000
Retained earnings
9,735,000
Treasury stock, at cost; 4,000 common shares
(44,000
)
Total shareholders' equity
$
14,156,000
During 2016, several events and transactions affected the
retained earnings of Consolidated Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31, 2015:
Paid-in
capital:
Preferred stock, 8.0%, 93,000
shares at $1 par
$
93,000
Common stock, 434,300 shares at
$1 par
434,300
Paid-in capital—excess of par,
preferred
1,545,000
Paid-in capital—excess of par,
common
2,595,000
Retained
earnings
9,245,000
Treasury stock, at
cost; 4,300 common shares
(51,600
)
Total shareholders'
equity
$
13,860,700
During 2016, several events and
transactions affected the retained earnings of Consolidated
Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2017:
Paid-in
capital:
Preferred stock, 8.0%, 83,000
shares at $1 par
$
83,000
Common stock, 333,300 shares at
$1 par
333,300
Paid-in capital—excess of par,
preferred
1,455,000
Paid-in capital—excess of par,
common
2,505,000
Retained earnings
8,345,000
Treasury stock, at cost; 3,300
common shares
(36,300
)
Total shareholders' equity
$
12,685,000
During 2018, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31, 2017:
Paid-in capital: Preferred stock, 8.8%, 95,000 shares at $1 par $
95,000 Common stock, 454,500 shares at $1 par 454,500 Paid-in
capital—excess of par, preferred 1,565,000 Paid-in capital—excess
of par, common 2,615,000 Retained earnings 9,445,000 Treasury
stock, at cost; 4,500 common shares (49,500 ) Total shareholders'
equity $ 14,125,000 During 2018, several events and transactions
affected the retained earnings of Consolidated Paper. Required:...
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2020:
Paid-in capital:
Preferred stock, 8.0%, 93,000 shares at $1 par
$
93,000
Common stock, 434,300 shares at $1 par
434,300
Paid-in capital—excess of par, preferred
1,545,000
Paid-in capital—excess of par, common
2,595,000
Retained earnings
9,245,000
Treasury stock, at cost; 4,300 common shares
(51,600)
Total shareholders' equity
$
13,860,700
During 2021, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:
1....
The balance sheet of Consolidated Paper, Inc., included the following shareholders’ equity accounts at December 31,...
The balance sheet of Consolidated Paper, Inc., included the
following shareholders’ equity accounts at December 31,
2017:
Paid-in capital:
Preferred stock, 8.5%, 94,000 shares at $1 par
$
94,000
Common stock, 444,400 shares at $1 par
444,400
Paid-in capital—excess of par, preferred
1,555,000
Paid-in capital—excess of par, common
2,605,000
Retained earnings
9,345,000
Treasury stock, at cost; 4,400 common shares
(44,000
)
Total shareholders' equity
$
13,999,400
During 2018, several events and transactions affected the retained
earnings of Consolidated Paper.
Required:...
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