The balance sheet of Consolidated Paper, Incorporated, included the following shareholders' equity accounts at December 31, 2023: Paid-in capital: Preferred stock, 8.0%, 97,000 shares at $1 par Common stock, 474,700 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 4,700 common shares Total shareholders' equity $ 97,000 474,700 1,585,000 2,635,000 9,645,000 (47,000) $ 14,389,700 During 2024, several events and transactions affected the retained earnings of Consolidated Paper. Required: 1. Prepare the appropriate entries for these events: a. On March 3, the board of directors declared a property dividend of 285,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $828,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15. b. On May 3, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $10 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $10 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 97,000 preferred shares, payable on December 28 to shareholders of record December 20. e. On December 1, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable on December 28 to shareholders of record December 20. 2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $870,000.
The balance sheet of Consolidated Paper, Incorporated, included the following shareholders' equity accounts at December 31, 2023: Paid-in capital: Preferred stock, 8.0%, 97,000 shares at $1 par Common stock, 474,700 shares at $1 par Paid-in capital-excess of par, preferred Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 4,700 common shares Total shareholders' equity $ 97,000 474,700 1,585,000 2,635,000 9,645,000 (47,000) $ 14,389,700 During 2024, several events and transactions affected the retained earnings of Consolidated Paper. Required: 1. Prepare the appropriate entries for these events: a. On March 3, the board of directors declared a property dividend of 285,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $828,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15. b. On May 3, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $10 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $10 per share. d. On December 1, the board of directors declared the 8.0% cash dividend on the 97,000 preferred shares, payable on December 28 to shareholders of record December 20. e. On December 1, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable on December 28 to shareholders of record December 20. 2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Incorporated at December 31, 2024. Net income for the year was $870,000.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...
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