Exercise 18-20 - Exercise 18-20 Requirement 1 a. March 3...

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Unformatted text preview: Exercise 18-20 Requirement 1 a. March 3 declaration date Investment in Laredo International stock ....................... 20,000 ..........................Gain on appreciation of investment ($720,000 - $700,000) 20,000 Retained earnings (240,000 shares at $3 per share)............................ 720,000 ....................................................Property dividends payable ....................................................................................720,000 March 15 date of record no entry March 31 payment date Property dividends payable .................................................... 720,000 ...............................Investment in Laredo International stock ....................................................................................720,000 b. May 3 Paid-in capital excess of par, common*....................... 90,000 .................................................Common stock (25% x [364,000 - 4,000] shares at $1 par) ................................................................................................. 90,000 *alternatively, retained earnings may be debited. c. July 5 Retained earnings (9,000 * x $10 per share).............................. 90,000 ...............................................................Common stock (9,000 * x $1 par) ........................................................................................9,000 ................Paid-in capital excess of par, common (difference) ......................................................................................81,000 * 2% x [360,000 + 90,000 shares] = 9,000 additional shares Exercise 18-20 (concluded) d. December 1 declaration date Retained earnings............................................................. 7,920 ..............................................Cash dividends payable ($90,000 par x 8.8%) ........................................................................................7,920 December 20 date of record no entry December 28 payment date Cash dividends payable .......................................................... 7,920 ........................................................................................Cash ........................................................................................7,920 e. December 1 declaration date Retained earnings............................................................. 229,500 ..............................................Cash dividends payable (459,000 * x $.50) ....................................................................................229,500 * 360,000 + 90,000 + 9,000 = 459,000 shares December 20 date of record no entry December 28 payment date Cash dividends payable .......................................................... 229,500 ........................................................................................Cash ....................................................................................229,500 Requirement 2...
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This note was uploaded on 12/14/2011 for the course ECON 104 taught by Professor Ismailov during the Spring '11 term at London College of Accountancy.

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Exercise 18-20 - Exercise 18-20 Requirement 1 a. March 3...

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