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891826-Chapter 14 WP

# 891826-Chapter 14 WP - E142...

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E14-2 Perez Corporation was organized on January 1, 2009. During its first year, the corporation issued 2,000 shares of \$50 par value preferred stock and 100,000 shares of \$10 par value common stock. At December 31, the company declared the following cash dividends: 2009, \$6,000, 2010, \$12,000, and 2011, \$28,000. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and not cumulative. (If answer is zero, please enter 0. Do not leave any fields blank.) 2009 2010 2011 Total dividend declaration \$ \$ \$ Allocation to preferred stock Remainder to common stock \$ \$ \$ Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and cumulative. (If answer is zero, please enter 0. Do not leave any fields blank.) 2009 2010 2011 Total dividend declaration \$ \$ \$

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Allocation to preferred stock Remainder to common stock \$ \$ \$ Journalize the declaration of the cash dividend at December 31, 2011, under previous question above. Date Account/Description Debit Credit Dec. 31 E14-3 On January 1, 2010, Deweese Corporation had \$1,000,000 of common stock outstanding that was issued at par. It also had retained earnings of \$750,000. The company issued 40,000 shares of common stock at par on July 1 and earned net income of \$400,000 for the year. Instructions Journalize the declaration of a 15% stock dividend on December 10, 2010, for the following independent assumptions. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.) 1. Par value is \$10, and market value is \$18. 2. Par value is \$5, and market value is \$20.
Account/Description Debit Credit 1. 2. E14-4 On October 31, the stockholders' equity section of Huth Company consists of common stock \$300,000 and retained earnings \$900,000. Huth is considering the following two courses of action: (1) declaring a 5% stock dividend on the 30,000, \$10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to \$5 per share. The current market price is \$14 per share.

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891826-Chapter 14 WP - E142...

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