E15-14 - Debit Retained Earnings 2,000,000 Common Stock...

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E15-14 (Entries for Stock Dividends and Stock Splits) The stockholders' equity accounts of Lawrence Company have the following balances on December 31, 2012. Common stock, $10 par, 200,000 shares issued and outstanding $2,000,000 Common stock 1,200,000 Retained earnings 5,600,000 Shares of Lawrence Company stock are currently selling on the Midwest Stock Exchange at $37. Prepare the appropriate journal entries for each of the following. (a) and (b) and provide answer for (c). (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.) (a) A stock dividend of 5% is declared and issued. Description/Account Debit Retained Earnings 370,000 Paid-in Capital in Excess of Par Common Stock Dividend Distributable (To record declaration) Common Stock Dividend Distributable 100,000 Common Stock (To record distribution of shares) (b) A stock dividend of 100% is declared and issued. Description/Account
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Unformatted text preview: Debit Retained Earnings 2,000,000 Common Stock Dividend Distributable (To record declaration) Common Stock Dividend Distributable 2,000,000 Common Stock (To record distribution of shares) (c) How much of a reduction in retained earnings results when a 2-for-1 stock split is declared and issued? $ 0 Solution E15-14 (a) Description/Account Retained Earnings (10,000 × $37) Paid-in Capital in Excess of Par Common Stock Dividend Distributable (To record declaration) Common Stock Dividend Distributable Common Stock (To record distribution of shares) (b) Description/Account Retained Earnings (200,000 × $10) Common Stock Dividend Distributable (To record declaration) Common Stock Dividend Distributable Common Stock (To record distribution of shares) (c) $0 No entry, the par value becomes $5.00 and the number of shares outstanding increases to 400,000....
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This note was uploaded on 03/25/2012 for the course ACCT 102 taught by Professor Benz during the Spring '12 term at CUNY Baruch.

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E15-14 - Debit Retained Earnings 2,000,000 Common Stock...

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