On January 1, 2014, Lanie Corporation had $1,086,000 of common stock outstanding

Question

On January 1, 2014, Lanie Corporation had $1,086,000 of common stock outstanding that was issued at par. It also had retained earnings of $741,200. The company issued 43,800 shares of common stock at par on July 1 and earned net income of $393,700 for the year. Journalize the declaration of a 14% stock dividend on December 10, 2014, for the following independent assumptions. (Round final answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. Par value is $8, and market value is $19. 2. Par value is $5, and market value is $20.

Explanation / Answer

Calculations 1
43800 shares sold @ 8 = 350,400 + 1086,000 =1436400 *.14 = 201096

dec 10      Retain Earnings            201096

                  dividend payable                     201096

Calculations
43800 shares sold @ 5 = 219,000 + 1086,000 =1,305,000 *.14 =182,700

Dec 10      Retain Earnings            182,700

                  dividend payable                    182,700

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