Question

On January 1, 2015, Thomson Inc. had the following account balances in its shareholders' equity accounts.

                       

                        Common stock, $1 par, 250,000 shares issued of

                        which 3,000 Shares being held as treasury stock             $250,000  

                        Paid-in capital excess of par, common                               500,000  

                        Preferred stock, $100 par, 10,000 shares outstanding      1,000,000

                        Paid-in capital excess of par, preferred                               100,000

                        Retained earnings                                                             2,000,000

                        Treasury stock, at cost, 3,000 shares                                    15,000

                       

                       

                        During 2015, Thomson Inc. had several transactions relating to common stock.

                       

                       

                        3/20                 Reissued 2,000 shares of treasury stock at $7 per share.

                        4/17                 Declared a 2 for 1 stock split on common stock effective 4/24.

                        7/18                 Declared and distributed a 5% stock dividend on outstanding                                               common stock; market value per share, $8.                      

11/1                 Declared a ten cents per share cash dividend on the outstanding      common shares.

                        11/25              Ex-dividend date for the cash dividend.

                        11/29              Date of record for the cash dividend.    

                        12/20              Paid the cash dividend declared on 11/1.

                       

                        Required:

Record the above transactions and events in the journal entry format.

Answer 1

Solution:

Journal Entries - Thomson INC.
Date	Particulars	Debit	Credit
20-Mar-15	Cash Dr	$14,000.00
	To Treasury Stock		$10,000.00
	To Additional Paid in Capital		$4,000.00
	(To record issue of treasury stock)
17-Apr-15	No Entry
18-Jul-15	Retained Earnings Dr (249000*2*5%*$8)	$199,200.00
	To Stock dividend distributable		$199,200.00
	(to record declaration of stock dividend)
18-Jul-15	Stock Dividend distributable Dr	$199,200.00
	To Common Stock		$24,900.00
	To Paid in capital in excess of Par - Common stock		$174,300.00
	(To record distribution of stock dividend)
1-Nov-15	Retained Earnings Dr [(249000*2 + 24900)*0.10]	$52,290.00
	To Dividend Payable		$52,290.00
	(To record declaration of cash dividend)
25-Nov-15	No Entry
29-Nov-15	No Entry
20-Dec-15	Dividend Payable Dr	$52,290.00
	To Cash		$52,290.00
	(To record payment of cash dividend)