Homework SourseListed below are the transactions that affected the sharehol
Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2013–2015. At December 31, 2012, the corporation’s accounts included:
November 1, 2013, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On March 1, 2014, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $2.5 million, but were purchased two years previously for $2.2 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
On July 12, 2014, the corporation declared and distributed a 6% common stock dividend (when the market value of the common stock was $17 per share). Cash was paid in lieu of fractional shares representing 600,000 equivalent whole shares.
On November 1, 2014, the board of directors declared a cash dividend of $0.60 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
On January 15, 2015, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $18 per share.
On November 1, 2015, the board of directors declared a cash dividend of $0.45 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
| Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2013–2015. At December 31, 2012, the corporation’s accounts included: |
Solution
Journal entries that Branch-Rickie recorded during the three-year period for these transactions are shown as below:
| S.no | Date | Particulars | L.F | Amount ($) in 000s | Amount ($) in 000s |
| 2013 | |||||
| a. | Nov-01 | Retained earnings | 66,000 | ||
| Dividend Payable | 66,000 | ||||
| (For devidend declared) | |||||
| 110,000*.6 | |||||
| Nov-15 | No entry | ||||
| Dec-31 | Dividend payable | 66,000 | |||
| Cash | 66,000 | ||||
| (For dividend paid) | |||||
| 2014 | |||||
| b. | Mar-01 | Investment in Bonds | 300 | ||
| gain on investments | 300 | ||||
| (For gain on investment recorded) | |||||
| 2.5-2.2 | |||||
| Retained Earnings | 2500 | ||||
| property dividend payable | 2500 | ||||
| (for property dividend declared) | |||||
| Mar-13 | No entry | ||||
| Apr-05 | Property dividend payable | 2500 | |||
| Investment in Bonds | 2500 | ||||
| (for property dividend distributed) | |||||
| c. | Jul-12 | Retained earnings | 1870000 | ||
| Common stock | 103400 | ||||
| Additional paid in capital | 1654400 | ||||
| Cash | 112200 | ||||
| (For common stock dividend paid) | |||||
| 110000000*6% = 6600000 | |||||
| 110000000-6600000= 103400000 | |||||
| d. | Nov-01 | Retained earnings | 1,28,040 | ||
| Dividend Payable | 1,28,040 | ||||
| (For devidend declared) | |||||
| 110,000+103400= 213,400*.6 | |||||
| Nov-15 | No entry | ||||
| Dec-31 | Dividend payable | 1,28,040 | |||
| Cash | 66,000 | ||||
| (For dividend paid) | |||||
| e. | 2015 | ||||
| Jan-15 | Retained Earning | 1,06,700 | |||
| Common stock | 1,06,700 | ||||
| for 213,400*.5 common stock declared) | |||||
| f. | Nov-01 | Retained earnings | 1,44,045 | ||
| Dividend Payable | 1,44,045 | ||||
| (For devidend declared) | |||||
| 110,000+103400+ 106700= 320,100*.45 | |||||
| Nov-15 | No entry | ||||
| Dec-31 | Dividend payable | 1,44,045 | |||
| Cash | 1,44,045 | ||||
| (For dividend paid) | |||||
