w CengageNowa l OnlirC Exercise 1318 Cash Dix DriveGoogle

w/ .: CengageNowa l OnlirC Exercise 13-18 Cash Dix \\ | Drive-Google Drive × Cengage om/ilm/takeAssignment/takeAssignmentMaindo?invoker-assignments&takeAssignmentSessionLoc; Print Item Calculator Entries for Selected Corporate Transactions Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows: Instructions: Journalize the transactions. If no entry is required, select \"No Entry Required\" from the dropdown box and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 5. Split the common stock 3 for 1 and reduced the par from $105 to $35 per share. After the split, there were 435,000 common shares outstanding. Date Account Debit Credit Jan. 5. Mar. 10. Purchased 35,000 shares of the corporation\'s own common stock at $38, recording the stock at cost. Date Account Debit Credit Mar. 10 Check My Work 2 more Check My Work uses remaining Previous Next

Solution

Answer

Date

Dr. $

Cr. $

5-Jan

No Entry

10-Mar

Treasury Stock (35,000 Shares * $38)

       1,330,000

Cash

1,330,000

30-Apr

Dividend

          268,000

Dividend Payable

     268,000

15-Jun

Dividend Payable

          268,000

Cash

     268,000

20-Aug

Cash (25,000 * $42)

       1,050,000

Treasury Stock (25,000 * $38)

   950,000

Additional Paid-in-capital - Treasury Stock [25,000 * $4(42-38)]

     100,000

15-Oct

Dividend

          297,750

Dividend Payable

     297,750

15-Oct

Retained Earnings (8500 * $44)

          374,000

Common Stock dividend distributable (8500 * $35)

     297,500

Additional paid-in-capital - Common Stock

       76,500

19-Dec

Dividend Payable

          297,750

Cash

     297,750

31-Dec

Common Stock dividend distributable (8500 * $35)

          297,500

Common Stock dividend distributable (8500 * $35)

     297,500

Note 1

There will be no entry for split and change in par value, as it changes only share value and no. of shares, The Total Equity capital will be same, so there will be no entry.

Note 2

Common Stock on May 15 for April 30 dividend

= 435,000 – 35,000 (Treasury Stock)

Common Stock on May 15 for April 30 dividend = 400,000 Shares

Dividend = Preference Dividend + Common Stock dividend

= (50,000 Shares * $4) + (400,000 Shares * $0.17)

Dividend = $268,000

Note 3

Common Stock on Oct 15 dividend

= 435,000 – 35,000 (Treasury Stock) + 25,000 (Treasury Stock issued)

Common Stock on May 15 for April 30 dividend = 425,000 Shares

Dividend = Preference Dividend + Common Stock dividend

= (50,000 Shares * $4) + (425,000 Shares * $0.23)

Dividend = $297,750

Note 4

Common Stock dividend = 2% * 425,000 Shares

= 8,500 Shares

Date		Dr. $	Cr. $
5-Jan	No Entry
10-Mar	Treasury Stock (35,000 Shares * $38)	1,330,000
	Cash		1,330,000
30-Apr	Dividend	268,000
	Dividend Payable		268,000
15-Jun	Dividend Payable	268,000
	Cash		268,000
20-Aug	Cash (25,000 * $42)	1,050,000
	Treasury Stock (25,000 * $38)		950,000
	Additional Paid-in-capital - Treasury Stock [25,000 * $4(42-38)]		100,000
15-Oct	Dividend	297,750
	Dividend Payable		297,750
15-Oct	Retained Earnings (8500 * $44)	374,000
	Common Stock dividend distributable (8500 * $35)		297,500
	Additional paid-in-capital - Common Stock		76,500
19-Dec	Dividend Payable	297,750
	Cash		297,750
31-Dec	Common Stock dividend distributable (8500 * $35)	297,500
	Common Stock dividend distributable (8500 * $35)		297,500