Question
In: Accounting
WILL RATE! The stockholders equity section of Benton Corporations balance sheet as of December 31, 2017...
WILL RATE!
The stockholders equity section of Benton Corporations balance sheet as of December 31, 2017 is as follows:
Stockholders Equity
CommonStock, $5 par value, authorized-2,000,000 shares..................... ...............$3,000,000
issued - 600,000 shares...................................................................$850,000
Paid in capital in excess of par........................................................................................................................4,500,000
Retained earnings..........................................................................................................................................8,350,000
The following event occurred during 2018:
1. Jan 5: 45,000 shares of authorized and unissued common stock were sold $8 per share
2. Jan 16: Declared a cash dividend of 20 cents per share, payable February 15 to stockholders of record on February 5.
3. Feb 10: 60,000 shares of authorized and unissued common stock were sold for $12 per share.
5. March 1: A 30% stock dividend was declared and issued. Fair value per share is currently $15.
6. April 1: A two-for-one stock split was carried out. The par value of the stock was to be reduced to $2.50 per share. Fair value on March 31 was $18 per share.
7. July 1: A 15% stock dividend was declared and issued. Fair value is currently $10 per share.
10.Nov 15
: A cash dividend of 20 cents per share was declared, payable September 1 to stockholders of record on Aug. 21,
Instructions: prepare journal entries for the year 2015 and prepare a comprehensive stockholders equity secti I N on the balance sheet
Solutions
Expert Solution
| Answer A. | ||||
| Journal Entry | ||||
| Date | Particulars | Dr. Amt. | Cr. Amt. | |
| 5-Jan | Cash | 360,000.00 | 45,000 Shares X $8 | |
| Common Stock | 225,000.00 | 45,000 Shares X $5 | ||
| Paid in Capital in Excess of Stated Value - Common Stock | 135,000.00 | 45,000 Shares X $3 | ||
| (record the issue of common stock) | ||||
| 16-Jan | Retained Earnings | 129,000.00 | 645,000 Shares X $0.20 | |
| Cash Dividends Payable | 129,000.00 | 645,000 Shares X $0.20 | ||
| (record the cash dividends declared) | ||||
| 10-Feb | Cash | 720,000.00 | 60,000 Shares X $12 | |
| Common Stock | 300,000.00 | 60,000 Shares X $5 | ||
| Paid in Capital in Excess of Stated Value - Common Stock | 420,000.00 | 60,000 Shares X $7 | ||
| (record the issue of common stock) | ||||
| 15-Feb | Cash Dividends Payable | 129,000.00 | ||
| Cash | 129,000.00 | |||
| (record the dividend paid) | ||||
| 1-Mar | Retained Earnings | 1,057,500.00 | 705,000 Shares X 30% X $5 | |
| Common Stock | 1,057,500.00 | 211,500 Shares X $5 | ||
| (record the declare and issue of stock dividend) | ||||
| 1-Apr | No Entry | |||
| 1-Jul | Retained Earnings | 2,749,500.00 | 1,833,000 X 15% X $10 | |
| Common Stock | 687,375.00 | 274,950 X $2.50 | ||
| Paid in Capital in Excess of Par | 2,062,125.00 | 274,950 X $7.50 | ||
| (record the declare and issue of stock dividend) | ||||
| 1-Aug | Retained Earnings | 421,590.00 | 2,107,950 X $0.20 | |
| Cash Dividends Payable | 421,590.00 | |||
| (record the cash dividends declared) | ||||
| 1-Sep | Cash Dividends Payable | 421,590.00 | ||
| Cash | 421,590.00 | |||
| (record the dividend paid) | ||||
| Answer 2. | ||
| Benton Corporation | ||
| Reatined Earnings Statement | ||
| For the Year Ended Dec 31, 2018 | ||
| Beginning Balance, Jan 1 | 8,350,000.00 | |
| Net Income | - | |
| Sub-Total | 8,350,000.00 | |
| Stock Dividends | (3,807,000.00) | |
| Cash Dividends | (550,590.00) | |
| Ending Balance, Dec 31, 2018 | 3,992,410.00 | |
| Net Income is not given in the question | ||
| Benton Corporation | ||
| Balance Sheet (Partial) | ||
| As of Dec 31, 2018 | ||
| Shareholders' Equity | ||
| Paid In Capital | ||
| Common Stock - $2.50 Par Value - 2,107,950 issued | 5,269,875.00 | |
| Paid in Capital in Excess of Stated Value - Common Stock | 7,117,125.00 | |
| Total Paid-in Capital | 12,387,000.00 | |
| Retained Earnings | 3,992,410.00 | |
| Total Shareholders' Equity | 16,379,410.00 | |
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