Question

Must show all calculations. Journal entries should be in proper format

Zinnia Company:

Zinnia Company incorporated on January 1, 2017. The company had authorized 1,500,000 shares of common stock, with a par value of $5 per share. The company had the following transactions during 2017:

Jan. 15     Issued 50,000 shares of common stock for $8 per share.

Sept. 1   Repurchased 5,000 shares of their common stock for $7 per share.

Nov. 1      Declared a $.50 per share cash dividend to be paid on Dec. 30 to stockholders of record on Dec. 1.

Required:

1. Prepare the necessary journal entries to record the above transactions.

Date	Account Titles	Debit	Credit

2. Assume that Zinnia Company declared a 15% stock dividend on Nov. 1 instead of a cash dividend. If the stock was trading at $10 per share on Nov. 1, what journal entry would the company record on Nov. 1?

Date	Account Titles	Debit	Credit

Answer 1

	Zinnia Company
	Journal Entries
Date	Partcular	Amount (DR)	Amount(CR)
15-Jan	Cash A/c=(50000*$8)	$        400,000.00
	Common Stock=(50000*$5)		$                                   250,000.00
	Additional Paid in capital(50000*$3)		$                                   150,000.00
1-Sep	Treasury Stock=(5000*$7)	$           35,000.00
	To Cash=(5000*$5)		$                                     25,000.00
	Additional Paid in Capital=(5000*$2)		$                                     10,000.00
	(Being amount of 5000 shares repurchased for $7 per share)
1-Nov	Retained Earnings A/c=(50000-5000)*.50	$           22,500.00
	To Dividend Payable		$                                     22,500.00
	(Being amount of dividend ddeclared)
1-Nov	Retained Earnings Account=(45000*15%*$10)	$           67,500.00
	To Common Stock=(45000*15%*$5)		$                                     33,750.00
	To Paid in capital excess of par=(45000*15%$5)		$                                     33,750.00
	(Being amount of stock dividend declared)