The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2020: Paid-in capital: Preferred stock, 7.5%, 98,000 shares at $1 pars Common stock, 484,800 shares at $1 par Paid-in capital-excess of par, preferred. Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 4,800 common shares. Total shareholders' equity 98,000 484,800 1,595,000 2,645,000 9,745,000 (52,800) $14,515,000 During 2021, 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 290,000 shares of Leasco, International common stock that Consolidated Paper had purchased in January as an investment (book value: $552,000). The investment shares had a fair value of $2 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 $11 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share. d. On December 1, the board of directors declared the 7.5% cash dividend on the 98,000 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 $0.50 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, Inc., at December 31, 2021. Net income for the year was $880,000.
The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2020: Paid-in capital: Preferred stock, 7.5%, 98,000 shares at $1 pars Common stock, 484,800 shares at $1 par Paid-in capital-excess of par, preferred. Paid-in capital-excess of par, common Retained earnings Treasury stock, at cost; 4,800 common shares. Total shareholders' equity 98,000 484,800 1,595,000 2,645,000 9,745,000 (52,800) $14,515,000 During 2021, 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 290,000 shares of Leasco, International common stock that Consolidated Paper had purchased in January as an investment (book value: $552,000). The investment shares had a fair value of $2 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 $11 per share. c. On July 5, a 1% common stock dividend was declared and distributed. The market value of the common stock was $11 per share. d. On December 1, the board of directors declared the 7.5% cash dividend on the 98,000 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 $0.50 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, Inc., at December 31, 2021. Net income for the year was $880,000.
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
Related questions
Question
M2
Transcribed Image Text:The balance sheet of Consolidated Paper, Inc., included the following
shareholders' equity accounts at December 31, 2020:
Paid-in capital:
Preferred stock, 7.5%, 98,000 shares at $1 pars
Common stock, 484,800 shares at $1 par
Paid-in capital-excess of par, preferred
Paid-in capital-excess of par, common
Retained earnings.
Treasury stock, at cost; 4,800 common shares.
Total shareholders' equity
98,000
484,800
1,595,000
2,645,000
9,745,000
(52,800)
$14,515,000
During 2021, 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
290,000 shares of Leasco International common stock that
Consolidated Paper had purchased in January as an investment (book
value: $552,000). The investment shares had a fair value of $2 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 $11 per share.
c. On July 5, a 1% common stock dividend was declared and distributed.
The market value of the common stock was $11 per share.
d. On December 1, the board of directors declared the 7.5% cash dividend
on the 98,000 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
$0.50 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, Inc., at December 31, 2021. Net income for the year was
$880,000.
I
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning