Accounting for corporations, stock issue, stock split, dividends

Sheet3 Sheet2 Sheet1 Paid In Capital in excess of Par Retained Earnings The Stock Holders Equity Section of the Balance Sheet of ABC Inc on 31 December 2008 is as follows: The following transactions took place in 2009 1) For the above transactions show journals and Stockholders Equity at the 31 December 2009 Total Stock Holders Equity Marks will be given for showing claculations of the value of dividends and for keeping track of the number of stocks issued and their par value Corporations Exam Practice Solution Journals Ref Description Dr Cr Dividend Payable Cash Common Stock Common stock PIC Excess Par Stockholders Equity 31 Dec 2009 dividend payable is a liability and doesn’t appear in stockholders equity Note : cash is an asset and doesn't appear in Stock holders Equity Common Stock 50,000 $10 par stocks issued Issue 10000 $10 par common Stocks at $14 2) 3) 4) Declare and pay a $2 per share cash dividend 5) No transaction see calculations for effect on no. of issued stock and par value Note 1 There are now 60000 $10 par stocks Note 2 2 for 1 stock split Note 3 There are now 120000 $5 par stocks 50% is large stock dividend, value at par Issue 60000 more $5 par stocks Note 4 There are now 180000 $5 par stocks Dividend $2 per share, value of issue is 180000*2 Declare and distribute a 10% stock dividend when market price per share is $6 Note 5 Declare and distribute a 50% stock dividend when market price is $7 per stock Before stock dividend, there are 180000 stocks Issue 18000 $5 par stocks at $6 value After stock dividend, there are 198000 $5 par stocks PIC Excess par Common stock dividend distributable Common Stock Small stock dividend, value at market price NOTES AND CALCULATIONS 000000.00 00000.00 00.00 000000.00 000000.00 0000000.00 0.00 000000.00 00000.00 00.00 000000.00 00000.00 00.00 00000.00 0.00 0.00 000000.00 00000.00 0.00 000000.00 000000.00 000000.00 0.00 000000.00 000000.00 000000.00 000000.00 0.00 000000.00 00000.00 0.00 00000.00 00000.00 0.00 00000.00 000000.00 00000.00 00.00 000000.00 000000.00 00000.00 0000000.00 000000.00 000000.00 0.00