Problem 2: On January 1, 2020 Crinkle Cut Fries Corporation
had the following stockholder’s equity accounts.
Common Stock ($5 par value, 200,000 shares issued and
outstanding) Paid in capital in Excess of Par- Common Stock
Retained Earnings
During the year, the following transactions occurred.
$1,000,000 200,000 840,000
Jan 15 Declared a $1 cash dividend per share to stockholders
of record on January 31, payable February
th 15 .
Feb 15 Paid the dividend declared in January
Apr 15 Declared a 10% stock dividend to stockholders of record
on April 30, distributable May 15. On
April 15, the market price of the stock was $15 per
share.
Jul 1 Announced a 2-for-1 stock split. The market price per
share prior to the announcement was $17.
(The new par value is $2.50)
Dec 1 Declared a $0.50 per share cash dividend to stockholders
of record on December 15, payable
January 10, 2021
31 Determined that net income for the year was $250,000.
A. Journalize the transactions and the closing entries for net
income and dividends.
Problem 3: Brett Adamo Corporation had the following
stockholder’s equity accounts on January 1, 2020. Common Stock ($1
par) $400,000, paid-in capital in Excess of Par-Common Stock
$500,000, and Retained earnings $100,000. In 2020, the company had
the following treasury stock transactions.
Mar. 1 June. 1 Sept 1 Dec 1
Purchased 5,000 shares at $7 per share. Sold 1,000 shares at
$10 per share.
Sold 2,000 shares at $9 per share
Sold 1,000 shares at $5 per share.
Brett Adamo Corp uses the cost method of accounting for
treasury stock.
A. Journalize the treasury stock transactions for 2020.