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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

ekkarill92 answered 1 year ago
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