These dividends are payable in 2015 Instructions a Prepare journal entries to

These dividends are payable in 2015 instructions a

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common stock. These dividends are payable in 2015.Instructions(a) Prepare journal entries to record the transactions described above.(b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $330,000. Answer:
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4. Cash (500 X $105) .................................................................................................. 52,500 Preferred Stock (500 X $100) ..................................................................... 50,000 Paid-in Capital in Excess of Par— Preferred Stock ........................................................................................ 2,500 5. Retained Earnings (1,900* X $45) .......................................................................... 85,500 Common Stock Dividend Distributable (1,900 X $5) ............................................................................................ 9,500 Paid-in Capital in Excess of Par— Common Stock ........................................................................................ 76,000 *(20,000 – 1,700 + 700 = 19,000; 19,000 X 10%) 6. Common Stock Dividend Distributable .................................................................. 9,500 Common Stock ........................................................................................... 9,500 7. Retained Earnings ................................................................................................... 66,800 Dividends Payable—Preferred (2,500 X $10) .......................................................................................... 25,000 Dividends Payable—Common (20,900* X $2) ........................................................................................ 41,800 *(19,000 + 1,900) (b) ANNE CLEVES COMPANY Stockholders’ Equity December 31, 2014 Capital stock Preferred stock, 10%, $100 par, 10,000 shares authorized, 2,500 shares issued and outstanding $250,000 Common stock, $5 par, 100,000 shares authorized, 21,900 shares issued, 20,900 shares outstanding 109,500 Total capital stock 359,500 Additional paid-in capital 205,500 Total paid-in capital 565,000 Retained earnings 627,700
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