The corporation declares a 5 stock dividend when the fair value of the stock is

# The corporation declares a 5 stock dividend when the

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Green Day Corporation has outstanding 400,000 shares of \$10 par value common stock. Thecorporation declares a 5% stock dividend when the fair value of the stock is \$65 per share. Prepare thejournal entries for Green Day Corporation for both the date of declaration and the date of distribution.BE15-14 Use the information from BE15-13, but assume Green Day Corporation declared a 100% stockdividend rather than a 5% stock dividend. Prepare the journal entries for both the date of declaration andthe date of distribution.* BE15-15 Nottebart Corporation has outstanding 10,000 shares of \$100 par value, 6% preferred stock and60,000 shares of \$10 par value common stock. The preferred stock was issued in January 2014, and nodividends were declared in 2014 or 2015. In 2016, Nottebart declares a cash dividend of \$300,000. How willthe dividend be shared by common and preferred stockholders if the preferred is (a) noncumulative and(b) cumulative?17.When treasury stock is purchased, the Treasury Stock account is debited and Cash is credited atcost (\$290,000 in this case). Treasury Stock is a contra stockholders’ equity account and Cashis an asset. Thus, this transaction has: (a) no effect on net income, (b) decreases total assets,  (c) has no effect on total paid-in capital, and (d) decreases total stockholders’ equity. 29.PreferredCommon   (a)Current year’s dividend, 7% \$  7,000\$21,000a\$28,000Participating dividend of 9%       9,000  Totals\$16,000\$48,000\$64,000a(see schedule below for computation of amounts) Total           27,000    36,000
The participating dividend was determined as follows: Current year’s dividend: Preferred, 7% of \$100,000 = \$  7,000 Common, 7% of  \$300,000 =   21,000 \$  28,000 Amount available for participation (\$64,000 – \$28,000) \$  36,000 Par value of stock that is to participate (\$100,000 + \$300,000) \$400,000 Rate of participation (\$36,000  ÷  \$400,000) 9% Participating dividend: Preferred, 9% of \$100,000 \$    9,000 Common, 9% of \$300,000     27,000 Dividends \$  36,000 (b) Preferred Common       Total           Dividends in arrears, 7% of \$100,000 \$  7,000 \$  7,000 Current year’s dividend, 7% 7,000 \$21,000 28,000 Participating dividend 7.25% (\$29,000  ÷  \$400,000)*          7,250       21,750       29,000 Totals \$21,250 \$42,750 \$64,000 *(The same type of schedule as shown in (a)  could be used here) (c) Preferred Common       Total           Dividends in arrears (\$100,000 X 7%) – \$5,000 \$2,000 \$  2,000 Current year’s dividend, 7% 7,000 7,000 Remainder to common             \$21,000       21,000 Totals \$9,000 \$21,000 \$30,000
BRIEF EXERCISE 15-1 Cash ..................................................................................... 4,500 Common Stock (300 X \$10) ........................................ 3,000 Paid-in Capital in Excess of Par—      Common Stock ...................................................... 1,500 BRIEF EXERCISE 15-2 (a) Cash ............................................................................. 8,200 Common Stock .................................................... 8,200 (b) Cash ............................................................................. 8,200 Common Stock (600 X \$2) .................................. 1,200 Paid-in Capital in Excess of Stated Value—      Common Stock ............................................... 7,000 BRIEF EXERCISE 15-4 Cash .................................................................................... 13,500 Preferred Stock (100 X \$50) ....................................... 5,000 Paid-in Capital in Excess of Par—    Preferred Stock ........................................................ 3,100 Common Stock (300 X \$10) ....................................... 3,000 Paid-in Capital in Excess of Par—    Common Stock ........................................................ 2,400 FV of common (300 X \$20) ................................................ \$  6,000 FV of preferred (100 X \$90) ................................................     9,000 Total FV ....................................................................... \$15,000 Allocated to common  \$15,000 \$6,000  X \$13,500 = \$  5,400 Allocated to preferred  \$15,000 \$9,000  X \$13,500 =     8,100 \$13,500
BRIEF EXERCISE 15-5 Land ..................................................................................... 31,000 Common Stock (3,000 X \$5) ...................................... 15,000 Paid-in Capital in Excess of Par—    Common Stock ........................................................ 16,000 BRIEF EXERCISE 15-6 Cash (\$60,000 – \$1,500) ..................................................... 58,500 Common Stock (2,000 X \$10) ..................................... 20,000 Paid-in Capital in Excess of Par—    Common Stock ........................................................ 38,500 BRIEF EXERCISE 15-8 8/1/14 Treasury Stock (200 X \$80) .......................... 16,000 Cash ....................................................... 16,000 11/1/14 Cash (200 X \$70) ........................................... 14,000

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