Mgmt_200_Spring_2008_solutions_4-11-08(4,17)

Mgmt_200_Spring_2008_solutions_4-11-08(4,17) - Common stock...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for April 11, 2008 E11–23. July 13, 2004 Retained earnings (-SE). .................................................................. 625,000,000 Dividends payable (+L). .............................................................. 625,000,000 2,500 (million) shares x $0.25 = $625,000,000 July 23, 2004 No journal entry required. August 16, 2004 Dividends payable (-L). ................................................................... 625,000,000 Cash (-A). ..................................................................................... 625,000,000 E11–25. Comparative results: Items Before Dividend and Split After Stock Dividend After Stock Split
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Common stock account $250,000 $312,500 $250,000 Par per share $5 $5 $ 4.00 Shares outstanding #50,000 #62,500 # 62,500 Capital in excess of par $ 300,000 $ 300,000 $ 300,000 Retained earnings $ 450,000 $ 387,500 $ 450,000 Total stockholders equity $1,000,000 $1,000,000 $1,000,000 Comments: Neither the stock dividend nor stock split changed total stockholders equity because neither involved the disbursement of assets. The stock dividend capitalized retained earnings and increased contributed capital by the same amount; it increased shares outstanding but did not change par value per share. The stock split did not change any account balances; its only effects were to (1) increase shares outstanding and (2) decrease par value per share....
View Full Document

This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

Ask a homework question - tutors are online