Homework SourseWest Yellowstone Outfitters Corporation manufactures and dis
West Yellowstone Outfitters Corporation manufactures and distributes leisure clothing. Selected transactions completed by West Yellowstone Outfitters during the current fiscal year are as follows:
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
| Jan. | 15 | Split the common stock 4 for 1 and reduced the par from $120 to $30 per share. After the split, there were 800,000 common shares outstanding. |
| Mar. | 1 | Declared semiannual dividends of $0.25 on 100,000 shares of preferred stock and $0.07 on the 800,000 shares of $30 par common stock to stockholders of record on March 31, payable on April 30. |
| Apr. | 30 | Paid the cash dividends. |
| May | 31 | Purchased 60,000 shares of the corporation’s own common stock at $32, recording the stock at cost. |
| Aug. | 17 | Sold 40,000 shares of treasury stock at $38, receiving cash. |
| Sep. | 1 | Declared semiannual dividends of $0.25 on the preferred stock and $0.09 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding, to be capitalized at the fair market value of the common stock, which is estimated at $40. |
| Oct. | 31 | Paid the cash dividends and issued the certificates for the common stock dividend. |
Solution
Journal Entry Date Accounting titles & Explanations Debit Credit jand 15 No entry 1-Mar Cash dividend 81000 Dividends payable 81,000 (preferred - 100000*.25= 25000 (common - 800,000*.07= 56000 30-Apr dividends payable 81,000 cash 81,000 31-May Treasury stock 1920000 cash 1920000 (60,000*32) 17-Aug Cash (40,000*38) 1520000 Treasury stock (40,000*32) 1280000 paid in capital in excess of par -TS (40,000*6) 240000 1-Sep Cash dividend 95,200 Dividends payable 95,200 (preferred -100,000*.25)= 25,000 common - 780,000*$.09)= 70200 Stock dividend (780,000*1%*40) 312000 Common stock dividend distributable(7800*30) 234000 Paid in capital in excess of par (7800*10) 78000 31-Oct Dividends payable 95,200 cash 95,200 Common stock dividend distributable 234,000 Common stock. 234,000
