Question
In: Accounting
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders’ equity of Palepu Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders’ equity of Palepu Company at December 31, 2015,
appears below.
| Common stock, $10 par value, 200,000 shares authorized; | |
| 85,000 shares issued and outstanding | $800,000 |
| Paid-in capital in excess of par value | 480,000 |
| Retained earnings | 315,000 |
During 2016, the following transactions occurred:
| May 12 | Declared and issued a 8% stock dividend; the common stock market value was $18 per share. |
| Dec. 31 | Declared and paid a cash dividend of 75 cents per share. |
a. Using the financial statement effects template, illustrate
the effects of these transactions.
Use negative signs with answers when appropriate. When applicable,
enter total amount for contributed capital.
| Balance Sheet | Income Statement | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Asset |
= | Liabilities | + | Contrib. Capital |
+ | Earned Capital |
Revenues | - | Expenses | = | Net Income |
| 5/12 Declared and paid stock dividend | Answer | + | Answer | = | Answer | + | Answer | + | Answer | Answer | - | Answer | = | Answer |
| 12/31 Declared and issued cash dividend | Answer | + | Answer | = | Answer | + | Answer | + | Answer | Answer | - | Answer | = | Answer |
b. Prepare the journal entries for these transactions.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| 5/12 | AnswerCashCommon stockAdditional paid-in capitalRetained earnings | Answer | Answer |
| Common Stock | Answer | Answer | |
| AnswerCashCommon stockAdditional paid-in capitalRetained earnings | Answer | Answer | |
| 12/31 | AnswerCashCommon stockAdditional paid-in capitalRetained earnings | Answer | Answer |
| AnswerCashCommon stockAdditional paid-in capitalRetained earnings | Answer | Answer | |
c. Post the journal entries from b to the related T-accounts.
| Cash (A) | |||
|---|---|---|---|
| 5/12 | Answer | Answer | |
| 12/31 | Answer | Answer | |
| Common Stock (SE) | |||
|---|---|---|---|
| 5/12 | Answer | Answer | |
| 12/31 | Answer | Answer | |
| Retained Earnings (SE) | |||
|---|---|---|---|
| 5/12 | Answer | Answer | |
| 12/31 | Answer | Answer | |
| Additional Paid-in Capital (SE) | |||
|---|---|---|---|
| 5/12 | Answer | Answer | |
| 12/31 | Answer | Answer | |
d. Prepare a retained earnings reconciliation for 2016 assuming
that the company reports 2016 net income of $283,000.
Do not use negative signs with answers below.
| PALEPU COMPANY Statement of Retained Earnings For the Year Ended December 31, 2016 |
||
|---|---|---|
| Retained earnings, December 31, 2015 | Answer | |
| Add: | ||
| AnswerNet incomeCash dividends declaredStock dividends declared | Answer | |
| Answer | ||
| Less: | ||
| Cash dividends declared | Answer | |
| AnswerNet incomeCash dividends declaredStock dividends declared | Answer | Answer |
| Retained earnings, December 31, 2016 | Answer | |
Solutions
Expert Solution
| Balance Sheet | Income Statement | |||||||||||||
| Transaction | Cash Asset | + | Noncash | = | Liabilities | + | Contrib. | + | Earned | Revenues | - | Expenses | = | Net Income |
| Asset | Capital | Capital | ||||||||||||
|
5/12 Declared and paid stock dividend (85000*8%*18) |
+ | = | + | $122,400.00 | + | -$122,400.00 | - | = | ||||||
|
12/31 Declared and issued cash dividend (85000+85000*8%)*0.75 |
-$68,850.00 | + | = | + | + | -$68,850.00 | - | = | ||||||
| Journal Entry- Palepu Company | |||
| Date | Account Title | Debit | Credit |
| 12-May | Retained Earning | $122,400.00 | |
| Common Stock (85000*8%*10) | $68,000.00 | ||
| Additional Paid in Capital (bf) | $54,400.00 | ||
| Dec. 31 | Retained Earning | $68,850.00 | |
| Cash | $68,850.00 | ||
| Cash | ||
| 12-May | 0 | 0 |
| 31-Dec | Credit | 68,850 |
| Common Stock | ||
| 12-May | Credit | 68,000 |
| 31-Dec | 0 | 0 |
| Retained Earning | ||
| 12-May | Debit | 122,400 |
| 31-Dec | Debit | 68,850 |
| Additional Paid In Capital | ||
| 12-May | Credit | 54,400 |
| 31-Dec | - | - |
| Statement of Retained Eanring | ||
| Beg Balance | $315,000.00 | |
| Stock Dividend | $122,400.00 | |
| Cash Dividend | $68,850.00 | |
| Less: Total Dividend declared & issued | $191,250.00 | |
| Net Income earned during year | $283,000.00 | |
| Ending Balance | $406,750.00 | |
ekkarill92 answered 2 years agoRelated Solutions
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders’ equity of Palepu Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders’ equity of Palepu Company at December 31, 2015,
appears below.
During 2016, the following transactions occurred:
Required
a. Using the financial statement effects template, illustrate
the effects of these transactions.
b. Prepare the journal entries for these transactions.
c. Post the journal entries from b to the related
T-accounts.
d. Prepare a retained earnings reconciliation for 2016 assuming
that the company reports 2016 net income of $283,000. Hint: Do not...
Analyzing and Identifying Financial Statement Effects of Dividends The stockholders’ equity of Kinney Company at December...
Analyzing and Identifying Financial Statement Effects of
Dividends
The stockholders’ equity of Kinney Company at December 31, 2015, is
shown below:
5% preferred stock, $100 par value, 10,000 shares
authorized;
4,000 shares issued and outstanding
$400,000
Common stock, $5 par value, 200,000 shares authorized;
50,000 shares issued and outstanding
250,000
Paid-in capital in excess of par value-preferred stock
40,000
Paid-in capital in excess of par value-common stock
300,000
Retained earnings
656,000
Total stockholders' equity
$1,646,000
The following transactions, among others,...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Kinney Company at December 31, 2011, is
shown below.
5% preferred stock, $100 par value, 10,000 shares authorized;
4,000 shares issued and outstanding
$ 400,000
Common stock, $5 par value, 200,000 shares authorized; 50,000
shares issued and outstanding
250,000
Paid-in capital in excess of par value—preferred stock
40,000
Paid-in capital in excess of par value—common stock
300,000
Retained earnings
656,000
Total stockholders' equity
$1,646,000
The following transactions, among...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Hammel Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Hammel Company at December 31, 2016, is
shown below.
5% preferred stock, $100 par value, 10,000 shares authorized;
6,000 shares issued and outstanding
$600,000
Common stock, $5 par value, 200,000 shares authorized; 70,000
shares issued and outstanding
350,000
Paid-in capital in excess of par value—preferred stock
50,000
Paid-in capital in excess of par value—common stock
400,000
Retained earnings
747,000
Total stockholders' equity
$2,147,000
The following transactions, among others,...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Kinney Company at December 31, 2011, is
shown below.
5% preferred stock, $100 par value, 18,000 shares authorized;
8,000 shares issued and outstanding
$ 800,000
Common stock, $5 par value, 200,000 shares authorized; 50,000
shares issued and outstanding
250,000
Paid-in capital in excess of par value—preferred stock
40,000
Paid-in capital in excess of par value—common stock
300,000
Retained earnings
656,000
Total stockholders' equity
$2,046,000
The following transactions, among...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Hammel Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Hammel Company at December 31, 2016, is
shown below.
5% preferred stock, $100 par value, 10,000 shares authorized;
6,000 shares issued and outstanding
$600,000
Common stock, $5 par value, 200,000 shares authorized; 70,000
shares issued and outstanding
350,000
Paid-in capital in excess of par value—preferred stock
50,000
Paid-in capital in excess of par value—common stock
400,000
Retained earnings
747,000
Total stockholders' equity
$2,147,000
The following transactions, among others,...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Hammel Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Hammel Company at December 31, 2016, is
shown below.
5% preferred stock, $100 par value, 10,000 shares authorized;
6,000 shares issued and outstanding
$600,000
Common stock, $5 par value, 200,000 shares authorized; 70,000
shares issued and outstanding
350,000
Paid-in capital in excess of par value—preferred stock
50,000
Paid-in capital in excess of par value—common stock
400,000
Retained earnings
747,000
Total stockholders' equity
$2,147,000
The following transactions, among others,...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Kinney Company at December 31, 2011, is
shown below.
5% preferred stock, $100 par value, 12,000 shares authorized;
5,000 shares issued and outstanding
$ 500,000
Common stock, $5 par value, 400,000 shares authorized; 100,000
shares issued and outstanding
500,000
Paid-in capital in excess of par value—preferred stock
40,000
Paid-in capital in excess of par value—common stock
600,000
Retained earnings
656,000
Total stockholders' equity
$2,296,000
The following transactions, among...
Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December...
Identifying and Analyzing Financial Statement Effects of
Dividends
The stockholders' equity of Kinney Company at December 31, 2011, is
shown below.
5% preferred stock, $100 par value, 28,000 shares authorized;
13,000 shares issued and outstanding
$1,300,000
Common stock, $5 par value, 320,000 shares authorized; 80,000
shares issued and outstanding
400,000
Paid-in capital in excess of par value—preferred stock
40,000
Paid-in capital in excess of par value—common stock
480,000
Retained earnings
656,000
Total stockholders' equity
$2,876,000
The following transactions, among others,...
Identifying and Analyzing Financial Statement Effects of Stock Transactions The stockholders' equity of Verrecchia Company at...
Identifying and Analyzing Financial Statement Effects of Stock
Transactions
The stockholders'
equity of Verrecchia Company at December 31, 2011, follows:
Common stock, $ 5 par value, 350,000 shares authorized; 150,000
shares issued and outstanding
$ 750,000
Paid-in capital in excess of par value
600,000
Retained earnings
346,000
During 2012, the following transactions occurred:
Jan. 5 Issued 10,000 shares of common stock for $12 cash per
share.
Jan. 18 Purchased 4,000 shares of common stock for the treasury at
$14 cash...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Question 2 : Aggregate Scores: Write a program that opens 2 files, quiz.txt, and hw.txt. The...
- Define the term symbiosis specifically as it applies in a biological context. Compare and contrast parasitism,...
- A research team conducted a study showing that approximately 20% of all businessmen who wear ties...
- Research the internet for companies that have executed data science projects. Pick one company and describe...
- Explain two theories or frameworks for understanding how Western Europe emerged out of 1,000 years of...
- Two cannons are mounted as shown in the drawing and rigged to fire simultaneously. They are...
- What is the potential of a cell made up of Zn|Zn2+ and Cu|Cu2+ half-cells at 25o...
ADVERTISEMENT