On October 31, Sunland Corporation's liabilities totalled $232,000. Its shareholders' equity consisted of common shares with acarrying amount of $936,000, with 93,600 common shares issued and retained earnings with a carrying amount of $276,800. Sunlandis considering the following three courses of action: (1) paying a $0.75 cash dividend, (2) declaring a 10% stock dividend, or (3)effecting a 3-for-1 stock split. The current market price for its common shares is $15 per share.Complete the following tabular summary of the effects of the alternative actions on Sunland's shareholders' equity and number ofcommon shares.Total assetsTotal liabilitiesCommon sharesRetained earningsTotal shareholders' equityTotal liabilities and shareholders' equityNumber of common sharesBeforeAction$1,444,800$232,000936,000276,8001,212,800$1,444,80093,600$$(1)After Cash Dividend(2)After Stock DividendtAtAtAAFTER STOCKSPLIT

Corporate Actions include Dividend, Stock Dividend and Stock Split.The dividend is a certain…

Answered: On October 31, Sunland Corporation's…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 9P

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On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the current fiscal year: During the year, the corporation completed a number of transactions affecting the stockholders equity. They are summarized as follows: a. Issued 500,000 shares of common stock at 8, receiving cash. b. Issued 10,000 shares of preferred 1% stock at 60. c. Purchased 50,000 shares of treasury common for 7 per share. d. Sold 20,000 shares of treasury common for 9 per share. e. Sold 5,000 shares of treasury common for 6 per share. f. Declared cash dividends of 0.50 per share on preferred stock and 0.08 per share on common stock. g. Paid the cash dividends. Instructions Journalize the entries to record the transactions. Identify each entry by letter.
Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the company has the following transaction: Mar. 1, issued 500,000 shares of stock at $15.75 per share for cash to investors. Journalize this transaction.
On January 1, 2021, Eugene Co. had retained earnings of P1,240,000. During 2021, the co. earned net income of P456,000. The following transactions occurred:a. Cash dividends of P12 per share on 42,000 shares of ordinary shares were declared and paid.b. A small share dividend was declared and issued. The dividend consisted of 6,620 shares of P25 par ordinary share. On the date of declaration, the market price of the company’s ordinary share was P34 per share.c. The co. recalled and retired 12,100 shares of P50 par preferred share. The call price was P93 per share; the share had originally been issued for P80 per share. d. The Eugene discovered that it had erroneously recorded depreciation expense of P200,000 in 2019 for both financial and tax reporting. The correct depreciation for 2019 had been P275,000. This is considered a material error. Assume tax rate of 25%. The balance of retained earnings on December 31, 2021:
On January 1, 2024, Accustart Corporation had 84,000 common shares, recorded at $659,400, and retained earnings of $1 million. During the year, the following transactions occurred: Apr. 2 June 15 Aug. 21 Nov. Dec. 20 (a) Issued 5,000 common shares at $20 per share. Declared a cash dividend of $0.25 per share to common shareholders of record on June 30, payable on July 10. Declared a 5% stock dividend to common shareholders of record on September 5, distributable on September 20. The shares were trading for $22 a share on August 21, $24 on September 5, and $27 on September 20. Issued 2,900 common shares at $24 per share. Declared a cash dividend of $0.30 per share to common shareholders of record on December 31, payable on January 10. Your answer is partially correct. Record the above transactions for 2024. (List all debit entries before credit entries. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is…
On January 1, 2024, Lawn Corporation had 87,000 common shares, recorded at $626,400, and retained earnings of $1 million. During the year, the following transactions occurred: Apr. 2 June 15. Aug. 21 Nov. 1 Dec. 20 (a) Issued 5,000 common shares at $20 per share. Declared a cash dividend of $0.15 per share to common shareholders of record on June 30, payable on July 10. Declared a 5% stock dividend to common shareholders of record on September 5, distributable on September 20. The shares were trading for $21 a share on August 21, $24 on September 5, and $26 on September 20. Issued 3,100 common shares at $25 per share. Declared a cash dividend of $0.20 per share to common shareholders of record on December 31, payable on January 10. Record the above transactions for 2024. (List all debit entries before credit entries. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no…
Crane Corporation has 12.50 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 76 cents per share cash dividend to stockholders of record as of June 14, payable June 30. Prepare the journal entries for each of the dates above assuming the dividend represents a distribution of earnings. How would the entries differ if the dividend were a liquidating dividend?
Assume that, on January 1, 2021, Matsui Co. paid $1,795,200 for its investment in 74,800 shares of Yankee Inc. Further, assume that Yankee has 220,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $440,000 at January 1, 2021. The following information pertains to Yankee during 2021: Net income Dividends declared and paid Market price of common stock on 12/31/2021 Multiple Choice $2,081,200. What amount would Matsui report in its year-end 2021 balance sheet for its investment in Yankee? $1,949,200. $220,000 66,000 $1,847,560. $ $ 26/share
Assume that, on January 1, 2021, Sacramento Corporation paid $1,622,400 for its investment in 62,400 shares of Angel Company. Further, assume that Angel has 260,000 total shares of stock issued. The book value and fair value of Angel's identifiable net assets were both $520,000 at January 1, 2021. The following information pertains to Angel during 2021: Net income $260,000 Dividends declared and paid $ 78,000 $ Market price of common stock on 12/31/2021 28/share What amount would Sacramento report in its year-end 2021 balance sheet for its investment in Angel? Multiple Choice $1,666,080. $1,960,400. $1,804,400. None of these answer choices are correct.
The outstanding share capital of KTI Corporation consists of 2,950 preferred shares and 7,000 common shayes for which $280,000 was received. The preferred shares carry a dividend of $7 per share and have $100 stated value. Instructions: Assuming that the company has retained earnings of $95,000 that is to be entirely paid out in dividends and that preferred dividends were not paid during the two years preceding the current year, state how much each class of shares should receive under each of the following conditions. a. The preferred shares are cumulative and non-participating. b. The preferred shares are cumulative and participating. Do not round intermediate calculations but round answer to nearest dollar.
Fetzer Company declared a $0.30 per share cash dividend. The company has 380,000 shares authorized, 361,000 shares issued, and 15,200 shares in treasury stock. The journal entry to record the payment of the dividend is:
On January 1, 2024, Lawn Corporation had 87,000 common shares, recorded at $626,400, and retained earnings of $1 million. During the year, the following transactions occurred: Apr. 2 June 15 Aug 21 Nov. 1 Dec 20 (a) issued 5,000 common shares at $20 per share. Declared a cash dividend of $0.15 per share to common shareholders of record on June 30, payable on July 10. Declared a 5% stock dividend to common shareholders of record on September 5, distributable on September 20. The shares were trading for $21 a share on August 21, $24 on September 5, and $26 on September 20. Date: Issued 3,100 common shares at $25 per share. Declared a cash dividend of $0.20 per share to common shareholders of record on December 31, payable on January 10. Your answer is partially correct. Record the above transactions for 2024. (List all debit entries before credit entries. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is…

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