This is the stockholders equity section of Leveon James and co. at December 31, 2018: 31-Dec-18...

	This is the stockholders equity section of Leveon James and co. at December 31, 2018:
		31-Dec-18	31-Dec-19
	Common stock, $10 par value, 1,000,000 shares issued & outstanding	10,000,000	10,000,000
	Additional paid-in-capital Common stock	3,000,000
	Retained Earnings	8,750,000
		$21,750,000
	The following transactions occurred in 2019:
1-Feb	Declared a cash dividend of $.50 per share to common shareholders of record on February 15th
	payable on March 1st
1-Mar	Paid the dividend declared on February 1st
1-Apr	Announced a 5 for 1 common stock split, the market price was $20 per share
1-Jul	Declared a 7% common stock dividend, distributable July 31st, the market price was $22 per share
31-Jul	Issued the shares for the stock dividend
1-Dec	Declared a commn stock cash dividend of .25 per share of record on December 15th
31-Dec	Net income for the year was $1,450,000
A.	Journalize the transactions.

B.	Prepare the December 31, 2019 stockholders equity section above

Expert Solution

A.

Date	Account title and explanation	Debit	Credit
Feb 1	Cash dividends [1,000,000 x $0.50]	$500,000
	Dividends payable-Common		$500,000
	[To record declaration of cash dividends]

Mar 1	Dividends payable-Common	$500,000
	Cash		$500,000
	[To record payment of cash dividends]

Apr 1	No Entry

July 1	Stock dividends [350,000 x $22]	$7,700,000
	Common stock dividend payable [350,000 x $5]		$1,750,000
	Additional paid in capital Common stock		$5,950,000
	[To record declaration of stock dividends]

July 31	Common stock dividend payable	$1,750,000
	Common stock		$1,750,000
	[To record distribution of stock dividends]

Dec 1	Cash dividends [5,350,000 x $0.25]	$1,337,500
	Dividends payable-Common		$1,337,500
	[To record declaration of cash dividends]

Dec 31	Income summary	$1,450,000
	Retained earnings		$1,450,000
	[To close net income]

	Retained earnings	$9,537,500
	Cash dividends [500000+1337500]		$1,837,500
	Stock dividends		$7,700,000
	[To close dividends]

B.

Leveon James
Balance sheet (Partial)
At December 31,2018
Stockholders' Equity:
Paid-in capital:
Common stock [5,350,000 x $5 par]	$26,750,000
Additional paid in capital Common stock [3,000,000 + 5,950,000]	$8,950,000
Total paid in capital	$35,700,000
Retained earnings [8750000+1450000-9537500]	$662,500
Total stockholders' equity	$36,362,500

Calculations:

	Common shares	Par
Beginning	1,000,000	$10
After stock split [1,000,000 x 5]	5,000,000	$5
Stock dividend [5,000,000 x 7 %]	350,000	$5
After stock dividends	5,350,000	$5

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